The U.S. unemployment rate dropped to 8.5 percent in December and the economy had a net gain of 200,000 jobs.

Friday's report from the Labor Department says the jobless rate is two-tenths of a percent better than the prior month, the best since February of 2009.

All of the job gains were in the private sector, while state and local governments cut 12,000 jobs.

High unemployment has made the economy a key issue in this year's presidential election campaign.