September’s rate came in at 7.8%, down from 8.1% in August.
The latest data also showed that the US economy added a further 114,000 jobs in September, slightly more than markets had expected.
The US jobs market is a key issue in the presidential election race.
When the unemployment rate was last this low, President Barack Obama was about to take office.
However, economist Sean Incremona of New York-based company 4Cast said the latest data showed that the US economy remained subdued.
“Generally, we are still seeing a mixed underlying picture that is neither too impressive nor terrible,” he said.
Fellow economist, Omer Esiner, of Rhode Island-based Commonwealth Foreign Exchange, was more upbeat.
“The headline of the day is clearly the drop in the unemployment rate, which was a big surprise,” he said.
“There is something in these numbers for everyone. The rise in the participation rate shows somewhat of a real improvement in the labour market.”
The latest official data showed that the construction sector added 5,000 jobs last month, while the number of people working in government jobs rose by 10,000.
However, the biggest gain was record in the healthcare sector, which added 44,000 jobs in September.
The Labor Department also used the release of the September data to revise up how many new jobs were created in both July and August. It said that 86,000 more jobs than first calculated were added across the two months.
Separate official figures released at the end of last month revised down by how much the US economy had grown between April and June.
Gross domestic product (GDP) in the second quarter grew at an annualized rate of 1.3%, down from the previous estimate of 1.7%.
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