Employers in the United States cut 345,000 jobs in May - far fewer than expected and the lowest monthly job loss since September.
Economists had forecast a total loss of 520,000 jobs in May.
The US Labor Department said the number of job losses in March and April was also revised down to 652,000 and 504,000 respectively.
The BBC reports the data provides further support to those who believe that the US economy is over the worst.
However, the US jobless rate rose to 9.4% in May, the highest since 1983, up from 8.9% in April.
Service sector industries shed 120,000 jobs in May. Another 156,000 jobs went in manufacturing, a figure which probably reflects shutdowns at car plants.
Construction industries shed 59,000 jobs, down from 108,000 in April.
Since the start of the recession at the end of 2007, the US economy has lost six million jobs.
In addition, the number of new houses built in the US hit a record low in April.