The unemployment rate fell to 8.9 percent in February, hitting the lowest point in nearly two years as employers started hiring at a faster pace.
The Bureau of Labor Statistics reported that several industries, including the manufacturing and construction sectors, saw job gains last month. In all, the economy added 192,000 jobs last month, marking the fastest pace of growth in almost a year. By contrast, state and local governments wrestling with budget shortfalls slashed 30,000 jobs, the most since November.
The government's report Friday bolstered hopes that employers will shift into a more aggressive hiring mode and allow the economic recovery to get on firmer footing.
The unemployment rate has been falling for three months, down from 9.8 percent in November. The jobless rate is now at the lowest point since April 2009.
House Speaker John Boehner called the numbers "welcome news," though he noted that the jobless rate is still "far above where the Obama administration promised it would be" when it pitched the stimulus package to the American people.
The number of unemployed people dipped to 13.7 million, almost double the number before the recession.
But Boehner called the improvement "a credit to the hard work of the American people" and Congress' vote to stop a tax hike at the beginning of the year.
"Now we must build on it by eliminating the job-crushing uncertainty being caused by excessive spending, borrowing, and regulating in Washington," Boehner said.
Senate Democratic Leader Harry Reid countered that Republicans' "reckless spending plan" would only eliminate jobs. Both sides are locked in a bitter debate over how much to budget for the rest of 2011.
"To keep our economy moving in the right direction, Republicans should work with us to quickly pass a long-term budget that reduces the deficit while protecting jobs, and gives businesses certainty," Reid said.
The monthly unemployment rate is based on surveys conducted for the Bureau of Labor Statistics of thousands of households and businesses. The jobless rate is smaller than the actual percentage of people in the United States who are unemployed, since it does not count people who have stopped looking for work. When those who have stopped looking for work and those who have settled for part-time employment are factored in, the rate rises to 15.9 percent.
Still, private employers added 222,000 jobs last month, the most since April. That shows that companies are feeling more confident in the economy and about their own financial prospects. And it bolstered hopes that businesses will shift into a more aggressively hiring mode and boost the economic recovery.
When factoring in the number of part-time workers who would rather be working full time and those who have given up looking for work, the percentage of "underemployed" people dropped to 15.9 percent in February. That's the lowest in nearly two years.
The positive news on the hiring front comes as the larger economy is gaining momentum.
American shoppers are spending more. U.S. exporters are selling more abroad. Manufacturing is growing at the fastest pace in nearly seven years. And the service sector, which employs about 90 percent of the work force, is expanding at the fastest clip in more than five years.
The Associated Press contributed to this report.