MANCHESTER, New Hampshire (AP) — Republican front-runner Mitt Romney has another emerging contender as he hopes to challenge President Barack Obama in November: The improving U.S. economy.

A new report released Friday says the U.S. unemployment rate has hit its lowest level in nearly three years, after a burst of hiring in December. With the economy the focus of this year’s presidential campaign, Romney has been hammering away not at his ever-changing cast of Republican rivals but at Obama, whose fate has been linked to the slow recovery from the Great Recession.

Obama still could face voters in November with the highest unemployment rate of a sitting president seeking election since World War II. Unemployment was 7.8 percent when Obama took office in January 2009.

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But Obama could benefit if the unemployment rate continues to fall. History suggests that presidents’ re-election prospects depend less on the unemployment rate itself than on the rate’s direction during the year or two before Election Day.

Meanwhile, Romney’s Republican presidential rivals are seeking to slow his campaign momentum after his slim win this week in the first-in-the-nation Iowa caucuses. They are blasting the former Massachusetts governor as too moderate ahead of a primary election on Tuesday he is heavily expected to win.

Former Pennsylvania Sen. Rick Santorum, who came in a mere eight votes behind Romney in Iowa, former House Speaker Newt Gingrich and Texas Rep. Ron Paul are attacking Romney as a less-than-reliable conservative too timid to combat unemployment.

But Romney is the favorite of the Republican mainstream, which sees him as the best challenge to Obama. It has hoped his executive experience as governor and businessman will resonate with voters upset by America’s slow economic recovery.

Ironically, in a year in which polls show the economy is overwhelmingly the top issue for voters, the first two contests are in states with low joblessness — 5.7 percent in Iowa and 5.4 percent in New Hampshire.

That all changes a week later with the following vote in South Carolina, where unemployment was 9.9 percent in November, according to the Bureau of Labor Statistics. That was 42nd among the states and more than a full percentage point higher than the national average.

Romney is all but certain to win Tuesday’s primary election in New Hampshire, where voters tend to be more moderate and where he owns a home. Romney is so heavily favored that he was campaigning Friday for a second day in South Carolina instead.

But Romney has been unable to grow past 25 percent in national opinion polls, as many Republican voters around the country find him insufficiently conservative on abortion, health care and other issues. Their beliefs create a natural opening for Santorum — a social conservative with strong views against abortion and gay marriage.

Santorum’s aides say he had raised $2 million on the strength of his Iowa showing, and the campaign sought to show momentum by announcing the support of a conservative anti-tax tea party leader in New Hampshire and, an online organization.

Santorum was likely to find a welcome audience among South Carolina conservatives.

But New Hampshire voters are already challenging his views. In an appearance before college students Thursday, Santorum was asked about his opposition to same-sex marriage, which is legal in New Hampshire. “So anyone can marry anyone else?” he replied, swiftly turning the conversation to polygamy. “So anyone can marry several people?” He soon grew testy under questioning.

Gingrich, speaking on ABC’s “Good Morning America” on Friday, predicted Romney would win New Hampshire but that one of his Republican rivals “will eventually emerge as the conservative alternative and will beat Romney.”

Romney all but ignored his rivals as he campaigned in New Hampshire and South Carolina. Instead, he criticized Obama as a “job killer.”

His more conservative rivals fought to hold down Romney’s vote totals in New Hampshire, then knock him off stride 11 days later in South Carolina, the first Southern primary of the year.

Also vying to emerge as Romney’s chief rival were Paul and former Utah Gov. Jon Huntsman, who skipped Iowa but won the endorsement of The Boston Globe on Thursday. It marks the second time Massachusetts’ largest newspaper has snubbed Romney, its former governor. Massachusetts neighbors New Hampshire.

Huntsman is counting on a strong finish in Tuesday’s primary to stay in the Republican race, while Texas Gov. Rick Perry skips New Hampshire in favor of South Carolina after a poor Iowa showing.

Paul was scheduled to arrive in New Hampshire on Friday, in time to campaign and participate in a pair of weekend debates.

Copyright 2012 The Associated Press.