President Barack Obama called yesterday’s jobs report a sign the U.S. economy is on the rebound. His prospects for re-election may depend on it.

The drop in the unemployment rate in December to 8.5 percent, a three-year low, showed the job market gaining momentum heading into a presidential election campaign that will be shaped by the state of the economy.

The Labor Department figures cap four months of declines in the unemployment rate and six consecutive months of jobs gains of 100,000 or more. Employers expanded payrolls by 200,000 in December, exceeding a median estimate of 155,000 in a Bloomberg News survey. For all of 2011, 1.64 million positions were created, the most since 2006, after a 940,000 increase in 2010.