The US announced Friday an explosion of 600,000 new jobs in March and April, casting aside the slur of a "jobless recovery" and igniting interest rate rise speculation.
The jobs boom also brought some pre-election political relief to President George W. Bush.
The economy churned out 288,000 new jobs in April, far more than the 165,000 predicted by private analysts, the Labor Department said.
In March, employers took on an upwardly revised 337,000 -- substantially more than first thought and the biggest number since October 1990.
The unemployment rate, measured by a separate survey, eased to 5.6 percent in April from 5.7 percent in March.
"The numbers are spectacular: across the board gains, upward revisions in previous months, confirming that the US economic expansion has a lot of momentum," said BMO Financial Group analyst Sal Guatieri.
The news set up expectations that Federal Reserve Chairman Alan Greenspan could raise key interest rates as early as the June 29-to-June 30 meeting of the Federal Open Market Committee.
"I think this report definitely advances the timing of a Fed rate increase, probably into the summer and possible early summer -- possibly at the next FOMC meeting," Guatieri said.
That prospect worried investors, who pushed Wall Street's blue-chip Dow Jones industrials average down 123.92 points, or 1.21 percent, to finish at 10,117.34.
At a meeting Tuesday, Federal Reserve policymakers held the federal funds target rate at a 1958 low of 1 percent but, faced with a humming economy, said rates can eventually rise at a "measured" pace.
Bush, under pressure because of the photographic revelations that US troops humiliated naked and hooded Iraqi prisoners in a jail near Baghdad, took comfort from the employment report.
* Manufacturers took on 21,000 extra workers. Revised figures showed factories had added 37,000 people since January, hauling out of a three-and-a-half-year slump in which 2.9 million jobs were lost.
* Builders hired an extra 18,000 people.
* Professional and business services let in 123,000 new workers, retailers added 23,000, the leisure and hospitality took on 36,000, and education and health service industries absorbed 31,000 extra staff.
* The government added 8,000 workers.
Source: AFP
"The economy has overcome a lot because the entrepreneurial spirit is strong. We've overcome a lot because of good policy," Bush said. "Since last August we've added 1.1 million new jobs. People are finding work in this country. The tax relief we've passed is working."
His presumptive Democratic challenger in the Nov. 2 presidential vote, Senator John Kerry, has targeted Bush's jobs record, and recent polls showed the economy was one of the president's weakest points.
"The longest jobless recovery during the post-war period is over and a self-reinforcing economic expansion has arrived," said Wells Fargo Banks chief economist Sung Won Sohn.
Prices on the federal funds futures markets indicated an 86-percent probability of a rate rise in June.
But Sohn said the following Federal Reserve meeting Aug. 10 was a more likely date for rates to go up because there few signs yet of upward pressure on wages.
The employment report showed the average work week in April was unchanged from March at 33.7 hours. Average weekly earnings climbed US$1.68 to US$525.38.
The steeper-than-expected jobs expansion added to a recent string of strong economic figures.
Surveys by the Institute for Supply Management this week showed the services industry running at the fastest pace since the polling began in July 1997, and manufacturers growing for the 11th consecutive month.
Stunning advances in productivity, or output for each hour worked, had been partly blamed for allowing employers to shut the door on new workers in the past years.
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