The economy added 243,000 jobs in January and the unemployment rate fell to 8.3%, its lowest level since February 2009.
The Labor Department said large gains in professional and business services, leisure and hospitality, and manufacturing jobs drove the gains, which came in well above most analysts' estimates. The rate in December was 8.5%.
Analysts surveyed by Econoday expected 135,000 new jobs in January with a range of estimates between 110,000 and 189,000.
The unemployment rate is down from 9.1% in August. Private-sector employment rose by 257,000 jobs in January, while government jobs declined by 14,000, the Bureau of Labor Statistics said. For 2011, governments shed 276,000 jobs at the local and state level.
Service industry jobs continued to climb in January with most of the 44,000 new leisure and hospitality jobs in food and drinking places. The Labor Department said food services added 487,000 jobs since a low in February 2010.
Retail sector employment also rose last month as department stores added 19,000 jobs, health stores added 7,000 and car dealers added 7,000, according to the BLS.
Jobs for nonresidential specialty construction increased by 30,000 the past two months, helping the construction industry add another 21,000 jobs last month on top of a December gain of 31,000.
The federal agency revised gains in nonfarm payrolls for November up to 157,000 from a prior reading of 100,000. The Labor Department slightly increased the December figure to 203,000 from 200,000.
The number of unemployed Americans fell to 12.8 million in January from 13.1 million the prior month, with the long-term unemployed, or those without jobs for 27 weeks or more, flat at 5.5 million, or nearly 43% of the unemployed.
The unemployment rate hit 9.8% in November 2010 and hovered around 9% for most of 2011 before decling the last few months.