document: Job growth lifts outlook on economy Unemployment rate reaches a two-year low as companies add 216,000 workers to the payrolls . Reporting from Washington and Los Angeles -- The nation 's job-creation engine revved up last month and pushed the unemployment rate to its lowest level in two years , spreading optimism that the economic recovery is firmly in place and giving President Obama a political boost . The economy lured back unemployed Americans who had given up hope of getting another paycheck as increases across nearly all sectors led to 216,000 additional jobs , the Labor Department said . The unemployment rate ticked down to 8.8 % -- a full percentage point lower than in November and the sharpest four-month drop in 28 years . Obama , trying to fend off a Republican push for deep budget cuts that administration officials warn could derail the recovery , said Friday that the economy was showing '' `` signs of real strength . '' '' But he cautioned that millions of Americans still are out of work and that '' `` we have to keep the momentum going . '' '' The improvement bettered economists ' predictions of about 200,000 new jobs and led forecasters to say that strong job growth appeared to have taken hold . Chris Rupkey , chief financial economist for the Bank of Tokyo-Mitsubishi in New York , said there was '' `` powerful forward momentum '' '' in the jobs market , which should help buffet the headwind on the economy from rising gasoline prices . That price rise , as well as uncertainty over the Middle East and debt-burdened economies in Europe , might yet cause the economy to slow again . But the favorable jobs report had an immediate effect on Wall Street , where the Dow Jones industrial average rose Friday to nearly 12,377 , and on the political scene , where Republicans could find it difficult to push their conservative agenda in Congress . Republicans have said that employers are n't hiring because of overregulation , overspending and the new healthcare law , and that the economic recovery requires a change of direction . As businesses start hiring again , that argument weakens . Republicans also could find it tougher to push for deep budget cuts as public-sector job losses continue to be one of the few major drags on employment . The GOP won big in elections last fall at a time when some economists predicted unemployment might hit double digits this year . Amid worries about the economy , Obama 's reelection prospects dimmed . But his standing in opinion polls has improved . And partly because of continued economic recovery , national polls show his reelection prospects now are as good or better after a little more than two years in office than Bill Clinton 's or George W. Bush 's , both of whom won second terms . At this point , Obama 's presidency is tracking closer to that of Ronald Reagan , who rode an economic rebound to victory , than to Jimmy Carter , who was bounced after one term because of economic woes . '' `` Reagan 's rise from a pretty unfavorable position ... was built on a dramatic improvement in jobs numbers in '' `` 83 and '' `` 84 , '' '' said Carroll Doherty , associate director of the nonpartisan Pew Research Center . During that two-year period , the unemployment rate fell from 10.4 % to 7.2 % . The recent drop in the unemployment rate from 9.8 % in November is the best since then . House Majority Leader Eric Cantor -LRB- R-Va . -RRB- downplayed the job growth , describing it as an '' `` uptick . '' '' While acknowledging it was good news , he said the still-high unemployment showed Republicans '' `` need to continue our efforts in Washington to foster pro-growth policies that will help businesses small and large to innovate and expand . '' '' White House officials were delighted by the new numbers , which they said surpassed their own internal projections . '' `` Obviously , things can go wrong , but this continues to be a very solid trend that we 've seen over the last year , '' '' said Austan Goolsbee , chairman of the Council of Economic Advisors . '' `` Yes , it was a deep hole , but we 're growing our way out of that hole . '' '' Optimism also has spread to unemployed workers , such as 37-year-old Air Force veteran Matthew Mabry of Bakersfield . On Thursday , he signed up for job-search help from Jewish Vocational Services .
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