The US unemployment rate fell to a new two-year low in March of 8.8%, from 8.9% in February.
It was the fourth monthly fall in a row. The unemployment rate has fallen by a percentage point during the last four months.
Employers created 216,000 jobs in March, the US Department of Labor said, higher than market expectations.
Other economic data showed a slight dip in manufacturing in March, although the report was seen as broadly positive.
The Institute for Supply Management’s (ISM) index of national factory activity dipped to 61.2 last month from 61.4 in February.
February’s rate was the highest since May 2004. Any reading above 50 indicates growth.
US and European stock markets were boosted by the economic news. London, Paris and Frankfurt all closed with gains of more than 1.5%, while the Dow was up 1% by late afternoon.
Most of the new jobs were created in the private sector, in factories, shops and health care, as well as in education and several professional and financial services.
David Sloan of IFR Economics said: “This [the jobs report] suggests the recovery is continuing.”
The new private sector jobs offset job losses in the public sector, mainly resulting from cuts by local government.
“The numbers are obviously good and one can hope that we will continue to see the market rise in continuing months,” said Bernard Baumohl, managing director and chief global economist of Economic Outlook Group.
If employers keep on creating jobs at this pace, as many economists expect, there will be a further 2.5 million new jobs in the US by the end of the year.
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