U.S. job growth soars!

Gain of 308,000 jobs far better than Wall Street's forecasts; unemployment rate up to 5.7 percent.

NEW YORK (CNN/Money) - U.S. payrolls grew at the fastest pace in nearly four years in March, the government said Friday, in a report that soared past Wall Street forecasts and could play a pivotal role in Fed policy and the presidential election.

Payrolls outside the farm sector grew by 308,000 jobs in March, the Labor Department said, compared with a revised gain of 46,000 in February. The unemployment rate, which is generated by a separate survey, rose to 5.7 from 5.6 percent.

Economists, on average, had expected 123,000 new jobs and unemployment at 5.6 percent, according to Briefing.com.

It was the strongest gain in payrolls since a matching gain of 308,000 in April 2000.

Payrolls grew an average 171,000 jobs a month in the first quarter, helped by upward revisions to January and February, versus average gains of 60,000 a month in last year's fourth quarter.





On Wall Street, stocks rallied as investors bet the pickup in the job market would help economic growth, and thus corporate earnings, justifying higher stock prices -- though that could change if traders start worrying more about rising interest rates.

Though employment often lags behind the rest of the economy, it has been slower than usual to recover from the 2001 recession, despite several quarters of economic growth, as firms have focused on cost-cutting, using technology to replace workers and sending some jobs overseas. That seemed to change in March, as 61 percent of all firms added jobs, the highest level since July 2000.

In its report, the department said service industries such as education and health care added 230,000 jobs in March. Goods-producing industries added 78,000 jobs, including 71,000 new construction jobs, helped by dry and mild weather across much of the country.

"Everything is falling into place, with the way our cyclical indicators are behaving," said Lakshman Achuthan, managing director of the Economic Cycle Research Institute (ECRI), a research firm that generates leading indicators of inflation and economic growth. "We should see the direction of job growth continue to improve."