WASHINGTON An unexpectedly rosy jobs report set off a chain reaction Friday, upending economists' gloomy predictions for the coming year, leading to a surge on Wall Street and potentially boggling the political calculus of the 2012 presidential campaigns.

The surprise - that the unemployment rate had dipped for the fifth straight month, to 8.3 percent - was first reflected in the stock market, where the Dow Jones industrial average soared to its highest mark since the beginning of the financial crisis. The tech-heavy Nasdaq, meanwhile, hit an 11-year high.

By noon, President Barack Obama, whose re-election chances have been threatened by the nation's economic woes, seized on the figures as proof that the recovery from the recession "is speeding up."

"Still, far too many Americans need a job or need a job that pays better than the one they have now," Obama said during an appearance at an Arlington, Va., firehouse. "But the economy is growing stronger."

The president pressed Republicans in Congress to support the economy by extending the payroll tax holiday that is set to expire at the end of this month.

The report forced his presidential rivals to adjust their rhetoric about the economy, which has played a leading role in the Republican debates. But they appeared ever ready to remind listeners that the unemployment rate remains elevated.

'A game-changer'

Exactly what lies ahead for the U.S. economy is far from clear. Even the more optimistic economists note that another downturn in Europe, or a spike in oil prices, another debt showdown in Washington or some other unexpected shock could derail the nation's unanticipated economic momentum.

But Friday's report depicted an economy that is gaining traction.

The number of jobs has been rising at a rate of 200,000 monthly, and those jobs are appearing in many parts of the economy, signaling a broad recovery. The growth was robust in the leisure and hospitality business, in the health care industry and in manufacturing, which added 50,000 jobs, a higher monthly figure than at any time since 1998.

For the past few months, the stop-and-start economic recovery has shown tentative signs of unanticipated strength, and Friday's report of another significant drop in the unemployment rate lent credibility to a bullish view, some economists said.

"This is a game-changer," Ian Shepherdson, chief U.S. economist at High Frequency Economics, said of Friday's employment figures. "The payroll numbers validate, in the market's eyes, what all the other data are saying."

The unemployment figures were startling enough that some analysts wondered whether they were correct. Friday's figures from the household survey were the first to incorporate the new population numbers from the 2010 Census. But the new unemployment rate was unaffected by the change, the Labor Department said.

In North Carolina, the latest data from the Bureau of Labor Statistics show the state's jobless rate at 9.9 percent for December.

Romney, Gingrich react

The nation's economy has been central to the presidential campaign rhetoric so far, with Republican candidates chastising the Obama administration for failing to pull the country out of the recession more quickly.

Even with the new jobs figures, a central point of their attack remains unblunted: The unemployment rate remains above 8 percent.

"Unfortunately, these numbers cannot hide the fact that President Obama's policies have prevented a true economic recovery. We can do better," former Massachusetts Gov. Mitt Romney said in a statement as he campaigned in Nevada ahead of today's GOP caucuses in that state.

Former House Speaker Newt Gingrich, when asked on CNN whether Obama deserves any credit for the lower unemployment rate, scoffed: "Give him some credit. If it makes you happy, give him some credit."

Kevin G. Hall of McClatchy Newspapers contributed.