The United States unemployment rate fell to 8.3 per cent in January, its lowest level in nearly three years, due to an unexpected surge in hiring, according to published government data.
The economy added 243,00 net jobs in December, the US Labour Department reported on Friday, much better than the average analyst forecast of 155,000. According to the Labour Department, US businesses increased hiring, adding 257,000 jobs.
The jobs report provided some good news for US President Barack Obama's re-election bid.
The US jobs figures helped stocks and the euro to rally on Friday despite further evidence that the 17-country eurozone is heading for recession.
The Dow Jones industrial average rose almost one per cent on opening. In Europe, the FTSE 100 index rose 1.2 per cent and Germany's Dax rose 1.4 per cent. The CAC 40 in France was 0.6 per cent higher.
"Job growth was widespread in the private sector, with large employment gains in professional and business services, leisure and hospitality, and manufacturing," the Labor Department said on Friday.
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Employment by governments, which had been shedding jobs under tight budgets, changed little over the month, it said.
The jobs growth brought down the jobless rate from 8.5 per cent in December.
Most analysts expected it would hold steady in January.
It was the fifth straight month the jobless rate has declined since August, when it stood at 9.1 per cent. The 8.5 per cent reading was the lowest since February 2009.
Job creation in January was the strongest since April 2011.
The overall unemployment to population ratio held firm at a low 58.5, around the same level it has been at for more than a year.
The Labour Department upwardly revised the December net jobs figure to 203,000 from an initial estimate of 200,000.
Job gains in the private sector reached almost all sectors, with the exception of information, finance and clothing retailers.