Growth in US jobs market picks up The US created 165,000 jobs in April and the unemployment rate fell to 7.5 per cent, sending US markets to record levels on Friday. Investors welcomed the data and reacted by pushing the benchmark S&P 500 past the 1,600 mark for the first time in history. Worries over a slowdown in the US economy were assuaged by the figures, which analysts had forecast a gain of 140,000 following an initial report of 88,000 new jobs in March. But large upward revisions for February and March, which collectively added 114,000 to job growth in those months, meant the data were more positive. The S&P 500 soared past the 1,600 and was trading 1.3 per cent higher to 1,617.60. The threshold has been considered a psychologically significant indicator of whether stocks could continue their rabid run higher. The benchmark has already climbed 13.2 per cent since the start of the year. The dollar also surged against the yen but fell back against the euro as investors switched into riskier assets. Commodities also rallied on the figures. All 10 major industry groups on the US benchmark rallied sharply with sectors most closely tied to the global economy, such as industrials and financials, leading in the gains. All 30 companies on the Dow Jones Industrial Average also traded higher, as that benchmark crossed 15,000 for the first time in history. It's been an unbelievable week. The challenge now is whether we can hold above this level for the next few days," said JJ Kinahan, chief strategist at TDAmeritrade. If we do, it will pressure funds managers and investors to come out of fixed income and into stocks. The jobs numbers suggest that some of the weakness in recent economic data, such as retail sales and durable goods orders, was due to bad weather in March. Tax rises at the start of the year and $85bn in public spending cuts across the board that began at the start of March appear to be holding the economy back but there is little sign of a new "spring slowdown." Alan Ruskin of Deutsche Bank in New York said: "Private payrolls now no longer seem to have had a spring swoon, especially when cold weather is considered." Average jobs growth for the past three months has been 212,000. Over the past six months, the average is 208,000. That suggests the US economy remains locked on a path of modest but resilient growth that brings the unemployment rate down only slowly. The figures mean there is little chance of the US Federal Reserve deciding to increase the $85bn-a-month pace of its third round of quantitative easing, despite saying earlier in the week that it was willing to adjust the pace up or down. Job creation in April was heavily weighted towards the service side of the economy. Retailers added 29,300 positions, business services created 73,000 jobs, healthcare hired a net 26,100 people and leisure and hospitality added 43,000 to their payrolls. That was offset by weakness on the production side of the economy, with construction shedding 6,000 jobs, which may be related to the unseasonable weather, cuts of 3,000 positions in mining and flat payrolls in the manufacturing sector. One weak spot in the report was a dip in average weekly hours worked from 34.6 to 34.4. Hours worked can be a leading indicator of hiring as employers ask existing staff to work longer before gaining the confidence to take on new staff. Paul Ashworth at Capital Economics in Toronto said: "All things considered, 165,000 isn't the biggest monthly gain in payrolls you'll ever see, but it's enough to assuage concerns that the economy had stalled again." The initial jobs figures have to be treated with caution as they are quite imprecise. The margin of error for the main payrolls number is plus or minus 90,000 jobs and for the monthly change in the unemployment rate it is 0.2 percentage points.