The economy added 200,000 jobs in December and the unemployment rate dropped to 8.5 percent, the U.S. Bureau of Labor Statistics reported.
Job gains occurred in transportation and warehousing, retail trade, manufacturing, health care and mining.
The unemployment rate has dropped 0.6 percentage point since August.
The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 5.6 million and accounted for 42.5 percent of the unemployed.
The number of people employed part time for economic reasons declined by 371,000, to 8.1 million, in December. Those people were working part time because their hours had been cut back or because they were unable to find a full-time job.
About 2.5 million people were marginally attached to the labor force in December, little different from a year earlier.