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The troubled US economy and President Barack Obama's embattled administration received a substantial confidence boost on Friday, as unemployment sank to a 32-month low of 8.6 percent in November.

Official figures showed the jobless rate fell sharply from 9.0 percent in the previous month, as the economy created 120,000 new jobs.

After months of joblessness lingering around 9.0 percent, the report was welcomed with relief.

"Woo-hoo!" said Robert Brusca, chief economist at FAO Economics.

"The jobs numbers are looking better."

Analysts also pointed to consistent upward revisions of past reports as evidence that the strength of the labor market may have been understated for months.

But while the Labor Department's report was one of the strongest since the global economic crisis began in 2008, it was not uniformly positive.

Economists pointed to a worryingly sharp drop in the number of people looking for work -- which helped push down the unemployment rate.

That could mean more jobseekers are being defeated by the relentless slog of finding a new position since the Great Recession and dropping out of the hunt all together.

And the net creation of 120,000 jobs was not as strong as expected, as government job cuts continued to eat into private sector gains.

The net gain was below the average 131,000 of the past 12 months.

But amid renewed global turmoil, the report offered a glimmer of hope that the United States is on the way to reassuming its role as an anchor for the world economy.

"Something good is stirring in the US economy," said Ian Shepherdson, chief US economist with High Frequency Economics.

The news could also provide a boost to President Barack Obama's hopes of reelection next November, giving him some defense against Republican claims that he has failed to get the economy back on track since the recession ended.

The unemployment rate now stands only slightly above the 8.5 percent rate President Ronald Reagan faced in December 1983, likewise 11 months ahead of the vote which ultimately reelected him to the White House.

But with recent data proving a sharp drop in unemployment can easily be reversed, the White House was careful not to declare victory prematurely.

"Today's employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression," said Alan Krueger, chairman of the White House Council of Economic Advisers.

"But the pace of improvement is still not fast enough given the large job losses from the recession that began in December 2007."

"We need faster growth to put more Americans back to work."

Obama and his advisors are also acutely aware that his efforts can be eroded by the financial crisis sweeping Europe.

"While the US economy is healing, the world economy continues to be in a fragile state and all economies are linked through trade and finance," said Krueger.

"It is important not to read too much into any one monthly report."

Republicans said the drop in unemployment was not enough.

"Any job creation is welcome news, but the jobless rate in this country is still unacceptable," said House Speaker John Boehner.

"The president's policies have failed."

Later on Friday Obama is expected to team up with former president Bill Clinton to unveil his latest effort to juice the economy -- a $4 billion public-private plan make buildings more energy efficient.

"Upgrading the energy efficiency of America's buildings is one of the fastest, easiest, and cheapest ways to save money, cut down on harmful pollution, and create good jobs right now," Obama said in a statement.

AFP