However, manufacturing cooled off in February and consumer spending stayed flat in January, taking the edge off the optimism.
Jobless claims fell by 2,000 to 355,000 in the week ending 25 February, figures from the Labor Department showed, continuing the decline seen in recent months.
The Institute for Supply Management said its index of national activity fell to 52.4 last month, indicating a mild expansion and surprising analysts who had looked for a stronger improvement.
And household income remained flat as inflation and taxes absorbed any benefit from lower unemployment.
“Consumer spending is off to a pretty weak start in the first quarter,” said Keith Hembre, economist at Nuveen Asset Management.
“That is painting a pretty weak picture for first-quarter GDP despite the strong jobs numbers.”
But stock markets cheered the strong employment data with the Dow Jones closing 0.2 per cent higher at 12,980.3.