The unemployment rate in the United States dropped 0.2 percentage points to 7.4 per cent in July, according to the government's monthly survey of households.
The rate was 8.2 per cent a year earlier. Last month's jobless rate is the lowest in nearly five years, dpa reported.
The Bureau of Labour Statistics' separate survey of employers found that total non-farm payrolls in the world's largest economy expanded by 162,000 in July - the slowest growth since March and less than the 12-month average of 189,000.
The payroll gains fell short of Wall Street expectations, according to a Bloomberg News survey of 93 economists, who had a median forecast of 185,000.
The number of long-term unemployed was steady at 4.2 million, and the labour participation rate dropped to 63.4 per cent from 63.5 per cent.
Hiring was strongest among retailers, wholesalers, bars, restaurants and the financial sector.
The unemployment report followed Wednesday's initial estimate of second-quarter growth at an annualized 1.7 per cent, according to the Commerce Department.
The rate-setting US Federal Reserve said later Wednesday that it would maintain its extraordinary monetary policy to bolster the economy, keeping its benchmark interest rate at an unprecedented near-zero rate and continuing to pump 85 billion dollars a month into money markets