The number of people looking for work in Sunderland fell by more than 1,100 in the last year.
There were 4,732 people claiming Jobseeker’s Allowance – paid only to those classed as officially looking for work – in the city in January.
That represents a fall of 1,153 year-on-year and a drop of 12 on the December figure.
Across the North East, the number of people in work was up 28,000 during the year.
The JSA claimant rate still stood at 3.9%, almost double the national rate of 2.2%, but the number of people who have been claiming for more than two years has halved since January 2014.
Paul Carbert, policy advisor at the North East Chamber of Commerce, said: “We’re very pleased to see the employment rate up 2.1% over the quarter; this is the largest rise in the country for the second month running.
“Although unemployment has decreased, it still remains high compared to the rest of the UK.
“The number of people in our region aged 16-64 who are classed as economically active has risen over the quarter. This may be due to people re-entering the labour market after being on long-term sick or caring for a relative who have not yet found work.
“Nevertheless, long-term unemployment is falling so the North East is definitely heading in the right direction.”
North East LEP Chief Economist Chris Milne said the manufacturing and service industries were leading the way in job creation across the region with 9,000 more jobs in manufacturing and 28,000 more in services.
“While we must not get carried away by short term fluctuations in statistics, today’s labour market figures give us reason for optimism,” he said.