Official figures show that US employment recorded a second straight month of solid gains in March, while the jobless rate fell to a two-year low of 8.8%.
Employment rose by 216,000 last month, the largest increase since May, the Labor Department said. January and February employment figures were revised to show 7,000 more jobs than previously reported.
The strong job gains come amid indications the economy suffered a minor setback early in the year as bad weather and rising energy prices dampened activity.
The private sector accounted for all the new jobs in March, adding 230,000 positions after February's 240,000 increase. Government employment fell 14,000, declining for a fifth straight month as local governments let go 15,000 workers.
The brightening labour market picture was also underscored by the unemployment rate, which dipped to 8.8%, the lowest since March 2009, from 8.9% in February.
The jobless rate, which is derived from a survey of households, has dropped by one percentage point since November, mostly reflecting employment gains rather than a rise in the number of discouraged workers.
It could start rising as the improving employment picture coaxes those who have given up the search for work to re-enter the labour market.
The jobless rate is one of the factors that could determine the timing of the Fed's first interest rate hike since it cut overnight lending rates to near zero in December 2008.
The Fed last month described the labour market as improving gradually and dropped a reference it had used in a statement in January to employers remaining reluctant to add to their workforce.
The US economy has recovered a fraction of the more than eight million jobs lost in the recession. Economists say job growth of between 250,000 and 300,000 a month is needed to have a sizeable impact on the pool of 13.5 million unemployed Americans.
Prices a worry despite manufacturing growth
Separate figures showed that growth in the US manufacturing sector slowed in March, as new orders grew less quickly than before and managers worried about higher commodity prices.
While the sector posted its 20th consecutive month of expansion, new orders, employment, inventories and exports slowed.
The Institute of Supply Management said its Purchasing Managers' Index fell to still-strong 61.2, from January's of 61.4. Any figure above 50 means growth.
'The recent trend of rapid growth in the manufacturing sector continued in March,' said ISM's Norbert Ore. 'While manufacturers are benefiting from strength in new orders and production, there is significant concern with regard to commodity prices.'
