The report included revised numbers for November and December, showing the economy added 247,000 jobs in those months -- 127,000 more than previously estimated.
The uptick to 7.9 percent comes two months after the rate fell to 7.7 percent in November -- the lowest since December 2008.
White House Council of Economic Advisers Chairman Alan Krueger said the report "provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression."
The report "is a reminder of the importance of the need for Congress to act to avoid self-inflicted wounds to the economy," he said.
Krueger called on Congress to "move toward a sustainable federal budget in a responsible way that balances revenue and spending ... while making critical investments in the economy that promote growth and job creation and protect our most vulnerable citizens."
Krueger noted that the economy has added 6.1 million jobs over the past 35 months, with 2.2 million of those added to the private sector in 2012.
The unemployment rate is affected by the number of jobs and the size of the workforce and in January both were changed.
The department said the economy added 157,000 jobs in January, about half the rate economists say is necessary to bring down the unemployment rate.
In addition, 2.4 million people were listed as marginally attached to the workforce, which is 366,000 fewer than January 2011, the department said.
That indicates that a trickle of workers who have stopped looking for work are renewing job searches, which increases the size of the workforce and that means more people are listed as unemployed.
On average, the department said, 181,000 jobs were added to the economy per month in 2012, which is too low to bring down the unemployment rate given the average number of people entering the workforce each month, economists say.
In addition, the department said 12.3 million people were unemployed in January, a figure that was "little changed," from the previous month.
In January, retailers added 33,000 jobs, better than the 20,000 per month average added by retailers to the economy in 2012. The construction sector added 28,000 jobs in January. Healthcare added an additional 23,000.
Employment also increased in wholesale trade (15,000) and mining (6,000). But transportation and warehousing lost 14,000 jobs. Couriers and messengers lost 19,000 jobs, the department said.
Average wages rose by 4 cents to $23.78 per hour in January. In the past 12 months, average hourly earnings have risen 2.1 percent, the department said.