Hiring by companies hits 5-year high in April

Investors on Wall Street cheered the report, which showed job gains across the board, with the exception of government. All three main U.S. stock indexes were up more than 1 percent at midday. U.S. government debt prices fell and the dollar was little changed against a basket of currencies.

While the economy has created jobs for seven straight months, gains remain too meager to make much of dent in the pool of 13.7 million Americans out of work.

A recent spike in first-time applications for state unemployment benefits caused some economists to worry that job growth could slow in May and June. Initial claims vaulted to an eight-month high last week.

Still, the pace of job growth averaged 233,000 over the past three months, an acceleration from 104,000 in the prior three months that suggests the recovery is growing firmer.

Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, said the rise "shows good momentum that should allow the economy to absorb the twin shocks from the Middle East and Japan without too much damage."

JOBLESS RATE UP

The unemployment rate in April backed away from a two-year low of 8.8 percent. It is derived from a separate survey of households, which showed a sharp decline in employment and a modest rise in the size of the labor force.

Economists, however, place more weight on the larger, less-volatile survey of employers, which found 46,000 more jobs that previously thought were created in the prior two months.

The report capped a good week for President Barack Obama, whose approval ratings received a lift from the killing of Osama bin Laden. A healthier jobs market could prove key to his hopes to win re-election in 2012.