US employment rose faster than expected in April, and hiring was much stronger than previously thought in the previous two months, a sign of resilience that should help the economy bear the blow from belt-tightening in Washington.
Jobs outside the farm sector rose 165,000 last month and the jobless rate fell to 7.5pc, the lowest since December 2008. The job counts for February and March were revised up by a net 114,000.
"This bolsters the case that the US economy will be able to survive the combined headwinds of sequestration and a deepening recession in Europe," said Scott Anderson, chief economist at Bank of the West in San Francisco.
Investors on Wall Street cheered the data, which beat economists' expectations for a 145,000 jobs gain and a steady 7.6pc reading on the unemployment rate.
US stocks jumped, with Standard & Poor's 500 index and the Dow Jones industrial average rising to intraday record highs. The dollar rallied against the yen, while Treasury debt prices fell.
Payrolls rose by 138,000 jobs in March, 50,000 more than previously reported, and job growth for February was revised up by 64,000 to 332,000, the biggest gain since May 2010.
But the gains last month were far below the 206,000 jobs-per-month average of the first quarter, the latest evidence that the economy is cooling, even if not as quickly as earlier feared.
Construction employment fell for the first time since May and manufacturing payrolls were flat.
The economy has been hit by higher taxes and $85bn (€65m) in federal government spending cuts, known as the sequester.
While the economy grew at a 2.5pc annual pace in the first quarter, data on construction spending, retail sales and trade suggested it ended the period with less speed. Factory data for April implied the economy continued to lose momentum at the start of the second quarter.
"While things may not be as bad as we thought, the economy has certainly slowed," said David Berson, chief economist at Nationwide Insurance in Columbus, Ohio.
More Americans entered the workforce than in any month since October. The labour force participation rate – the share of working-age Americans who have a job or are looking for one – held steady at a 34-year low of 63.3pc.
While the pace of hiring was stronger than expected in April, it was below the 300,000 jobs a month economists say are needed to put a significant dent in the jobless rate.