Economy Gains Steam as 200,000 New Jobs Added John Moore/Getty Images Job applicants waited to enter a career fair in Denver early last month. The United States added a robust 200,000 new jobs last month, the Labor Department said Friday, in a sign that the long-awaited economic recovery has finally built up a head of steam. Source: Bureau of Labor Statistics The nation's unemployment rate fell to 8.5 percent in December, from a revised 8.7 percent in November, the government said. The Labor Department revised the number of new jobs added in November to 100,000, from 120,000. The employment report built on a flurry of heartening economic news in December, when consumer confidence rose, manufacturing came in strong and small businesses showed signs of life. It was the sixth consecutive month that the economy added at least 100,000 jobs - not enough to restore employment to pre-recession levels, but enough, perhaps, to cheer President Obama as he enters an election year. The upward trend restored some of the ground lost this spring and summer, when global events like the earthquake in Japan and domestic ones like the debt ceiling debate slowed the American recovery to a crawl and raised fears of a second recession. Then, even signs of modest growth were dismissed as too anemic. Now, they are drawing tentative praise. "People were very much thinking that the sky was falling," said Tom Porcelli, an economist at RBC Capital Markets. It's no small victory that we're up here, even with all these headwinds. Up here, Mr. Porcelli was quick to note, is none too lofty a perch. Lowering the unemployment rate significantly would require many more jobs a month than the economy has been adding. And there are several factors that could weigh down what momentum there is. Congress may yet decline to continue extensions of the payroll tax break and unemployment benefits that have given families a lift and boosted spending. Money, in the form of loans, is still hard to come by. Home values continue to drop. And though the most recent numbers make it appear the United States is shrugging off the troubles in the euro zone, a severe slowdown there or, worse, a catastrophic financial collapse, is still a threat. Still, optimists were quick to trumpet the American economy's resilience. "This is the real thing," said Ian Shepherdson of High Frequency Economics. This is finally the economy throwing off the shackles of the credit crunch. The numbers were foreshadowed in a report by ADP, the payroll processing company, that showed a whopping gain of 325,000 private-sector jobs in December. ADP's reports do not always correlate closely with the Labor Department's findings, but they can provide additional insight. Diane Swonk, an economist with Mesirow Financial, said most of the new jobs in the ADP payroll report were at small businesses and that generally only newer small businesses used a payroll company. "It's one of those things where you look at that and say, "That would be really cool if that continues," " Ms. Swonk said. It's not just small business - it's new business formation. Ms. Swonk said the Labor Department numbers tend to underestimate growth in small business jobs and the self-employed, both of which can be indicators of a turnaround. Other factors, like seasonal adjustment, could actually make the economy look better than it is. Seasonal adjustments are calculated based on the patterns of recent years. Because the recession began in December 2007, a drop-off at that time of year is now part of the pattern, and anything else looks better by comparison. But there are indications that there is more to the good news than a statistical fluke, said Ellen Zentner, an economist with Nomura, pointing to the big jump in consumer confidence in December. "People do not feel more upbeat for no reason," she said. Because of an editing error, an earlier version of this article, and an e-mail alert, misstated the unemployment figure for November. Although it was initially given a month ago as 8.6 percent, it was revised Friday to 8.7 percent.