The increase in payrolls is the latest sign that the economic recovery is gaining momentum and healing in the job market is beginning. Still, the healing is likely to be slow, and most economists don't expect new hiring to be fast enough this year to rapidly reduce the unemployment rate.
"What we need in the economy is to have 200,000 to 250,000 jobs per month on a sustained basis to really eat into and drop that unemployment rate," CBS MoneyWatch.com editor at large Jill Schlesinger said.
The Labor Department said employers added 162,000 jobs in March, the most since the recession began but below analysts' expectations of 190,000. The total includes 48,000 temporary workers hired for the U.S. Census, also fewer than many economists forecast.
Private employers added 123,000 jobs, the most since May 2007.
"This is better news in that the economy is moving in the right direction. It may not be as fast as we'd like to see it but we are finally moving in the right direction," Mark Vitner, senior economist at Wells Fargo, told CBS Radio News.
Still, there are 15 million Americans out of work, roughly double the total before the recession began in December 2007. More Americans entered the work force last month, which prevented the increase in jobs from reducing the unemployment rate.
President Barack Obama told workers at a high-tech battery plant in Charlotte, N.C., that his aggressive if unpopular policies helped add jobs.
"We are," he said.
But he also sounded a cautionary note. "We shouldn't underestimate the difficulties we face," he said. "We're still going through a hard time."
The economy likely began recovering in the middle of last year, but is only now showing modest job gains.
"It is still disappointing that it took roughly nine months before we started to see any meaningful rebound" in jobs, Paul Ashworth, senior U.S. economist at Capital Economics, wrote in a note to clients.
The stock market is closed Friday. Interest rates rose in the bond market after the report. Investors often sell Treasurys and favor riskier assets like stocks and commodities when the economy is improving.
Manufacturers added 17,000 jobs, the third straight month of gains. Temporary help services added 40,000, while health care added 37,000. Leisure and hospitality added 22,000.
Even the beleaguered construction industry added 15,000 positions, though that likely reflects a rebound from February, when major snowstorms may have kept many construction workers off payrolls.
The average work week increased to 34 hours from 33.9, a positive sign. Most employers are likely to work current employees longer before they hire new workers.
The department also revised January's job total to show a gain of 14,000, up from a previously reported loss of 26,000. February's job numbers were also revised higher by 22,000 to show a loss of 14,000. The economy has now added jobs in three separate months since the recession began.
Still, more Americans said they were working part-time even though they preferred full-time work. When they and discouraged workers who have given up searching for jobs are included, the "underemployment" rate ticked up to 16.9 percent from 16.8 percent.
"What needs to happen is we first see employers add temps to the payrolls. Then they extend the hours of their current workers. Then, hopefully, demand … picks up and they need to hire full-time employees. It looks like we're a few months away from that," Schlesinger told CBS Radio News.
And average hourly earnings fell by two cents to $22.47. That shows that high unemployment is enabling companies to hold down wages. Average weekly earnings rose by about $3 to $629.37, partly reflecting the longer work week.
In a stark illustration of how hard it remains for many people to find jobs, the number of those out of work for six months or longer increased to 6.5 million, a record high.
More than 44 percent of those out of work are long-term unemployed, also a record.
"For those laid off, unemployment is stretching longer and longer and putting severe distress on families," said Christine Owens, executive director of the National Employment Law Project, a nonprofit advocacy group.
Still, Friday's jobs report follows positive data earlier this week that showed consumers are increasing their spending and manufacturing activity is growing at its fastest pace in more than five years. Economists are increasingly confident that the nation will avoid a "double-dip" recession, in which growth slows after a short burst at the end of last year.
"The stars are starting to align here," said Brian Bethune, chief U.S. financial economist at IHS Global Insight.
The economy is likely to expand at a roughly 3 percent pace in the current January-to-March quarter, analysts predict. That's roughly half the 5.6 percent pace seen in the final quarter of last year.
Normally, growth in the 3 percent range would be considered respectable. But the nation is emerging from the worst recession since the 1930s. Growth needs to be in the 5 percent range or higher to quickly drive down the unemployment rate. Both the Federal Reserve and Obama administration expect joblessness will remain above 9 percent through the end of this year.