Watch CBSN Live

U.S. Job Growth Soars

After months of dismal job growth, the nation's employers dusted off their help-wanted signs in March and added workers at the quickest pace in four years, .

Even so, the unemployment rate inched up a tenth of a point to 5.7 percent as more people were encouraged to start looking for work again but failed to find jobs, the Labor Department said Friday.

On Wall Street, investors pushed stocks higher after release of the report, which showed widespread hiring in industries across the economy. The Dow Jones industrial average was up 97 points for the day at 10,470.59. The Nasdaq added 42 points to close at 2,057.17.

President Bush, whose re-election could depend in large part on the strength of the jobs market, quickly embraced the new figures.

"The policies are working," Bush said on his seventh visit to West Virginia, a battleground state he hopes to win again in November's election. He was there promoting his "Jobs for the 21st Century" training program.

Polls consistently show that jobs and the economy are the top concerns for voters, and a majority favor Democrat John Kerry on those issues. Nearly 2 million jobs have been lost since Bush took office in January 2001. Democrats routinely note that Bush's job creation record is the worst of any president since the Great Depression.

"After three years of punishing job losses, the one-month job creation announced today is welcome news for America's workers. I hope it continues," Kerry said in a statement.

The report gave economists hope that the weak labor market was turning a crucial corner.

The gain in payrolls far exceeded the 122,000 expected by economists surveyed by CBS MarketWatch. Economists had been waiting in vain for months for hiring to pick up to match the explosive growth in U.S. gross domestic product over the past nine months.

"I'm not saying the labor markets are back where they need to be, but this latest job advance together with the positive revisions are making this look like a normal recovery," said economist Ken Mayland, president of ClearView Economics.

For the first time in 44 months, the nation's factories did not shed jobs. But they didn't hire either.

Revisions to payroll figures also showed a stronger jobs market in the first two months of the year than previously thought. Companies added 205,000 jobs in January and February, instead of the 118,000 reported last month.

"It looks like we're seeing quite a few places where job creation has started to accelerate," said Gary Thayer, chief economist at A.G. Edwards & Sons Inc. in St. Louis. "It's a good start, but we need to see consistent, good job growth."

The Federal Reserve still isn't likely to rush to boost short-term interest rates, which are currently at a 45-year low of 1 percent, until the job market maintains hiring gains, economists said.

The economy has rebounded strongly, but companies, under intense pressure to compete globally, have been holding down their costs by giving existing employees more work instead of taking on new ones. That appears to be changing. Businesses have added to their payrolls — however slightly — for seven straight months.

March's overall payroll increase of 308,000 was the highest since a match in April 2000. The last time more jobs were added was in March 2000, with an increase of 493,000.

"It is too early to celebrate," said Sung Won Sohn, chief economist at Wells Fargo in Minneapolis.

He noted that most of the increase was because of part-time workers. The number of people who worked part time for economic reasons rose to 4.7 million in March, up from 4.4 million the previous month.

"The average duration of unemployment has been lengthening, persuading unemployed workers to accept part-time jobs," Sohn said.

"I would not say that it's just happy days are here again. I think we really need to deal with the reality of significant structural change in many segments of the U.S. economy," economist John Silvia told CBS News Correspondent Anthony Mason.

The U.S. is losing about 250,000 jobs each year due to structural changes like outsourcing, reports Mason.

Most economists believe those outsourced jobs are not coming back, but U.S. companies are earning record profits and surveys show many of them are now ready to spend that money hiring more workers here at home, reports Mason.

In March, there were 8.35 million people unemployed, compared with 8.17 million the previous month. The average duration of unemployment has been more than 20 weeks, a 20-year high.

Technical factors also contributed to the overall hiring increase, Sohn said. Good weather helped boost employment in construction, which rose by 71,000 last month. The end of a strike by California grocery workers was a big factor in the increase in retailers' payrolls, which were up by 47,000.

The average monthly gain in jobs in the past eight months has been about 95,000 — far below the 150,000 to 200,000 jobs needed to absorb new entrants into the labor force, Sohn said. Like last month, the unemployment rate could rise in coming months as workers decide to resume their job searches.

"So overall, this is a good employment report but not a super employment report," said Anthony Chan, chief economist at Banc One Investment Advisors.

The jobless rate for blacks rose to 10.2 percent from 9.8 percent in February. For whites, the rate rose to 5.1 percent from 4.9 percent. It remained unchanged at 7.4 percent for Hispanics.