The national unemployment rate dropped to 8.3-percent in January, the lowest rate since February 2009.
Citing widespread job growth in the private sector, a new Labor Department report says 243-thousand jobs were added last month.
American employers substantially stepped up their hiring in January, bringing the unemployment rate down for the fifth month in a row.
January's numbers for added jobs marked a pick-up in hiring from December, when the economy added 203,000 jobs.
Job growth was much stronger than expected. Economists surveyed by CNNMoney had forecast 130,000 jobs added in the month, and that the unemployment rate likely ticked up to 8.6%.
"This is an optimistic jobs report, especially in light of very poor jobs reports for almost three years," said Brian Hamilton, CEO of Sageworks, a financial information company. "We don't know if the positive jobs trend will continue, but it is definitely a good trend."
The encouraging news was coupled with revisions to the Labor Department's data, showing the economy added 180,000 more jobs than originally thought in 2011.
Private businesses have been adding jobs consistently since March 2010. In January, they added 257,000 jobs.
But the government has been bleeding jobs since the middle of 2010, and continued to do so last month. Most of the recent job losses have been at the state and local level. Overall, the public sector cut 14,000 jobs in January.
The job market has a long way to go to fully recover from the financial crisis. The economy still needs to add about 5.6 million jobs to get back to 2008 employment levels. To top of page
The business services, manufacturing, and leisure and hospitality sectors had the largest jump in employment.