The U.S. unemployment rate dropped two-tenths of a percent in December to a six-year low of 5.6 percent.
Friday's closely-watched report from the Labor Department also said the economy had a net gain of 252,000 jobs.
Both figures were better than most economists had predicted and cap the strongest year of job growth in 15 years.
While the unemployment rate has fallen a full percentage point over the last year, 8.7 million people remain jobless, and another 6.8 million want full time jobs but can find only part-time employment.
Friday's data also show wage growth is barely keeping ahead of inflation.