The February jobs report released Friday was a surprise to many, but this time it was a pleasant surprise.  U.S. employers added 236,000 jobs last month, causing the unemployment rate to drop from 7.9 percent to 7.7 percent, the lowest rate since December 2008.  Economists surveyed by Reuters had expected the job gain this month to be far lower at around 160,000.  

The reaction on Wall Street was strong, as the Dow Jones industrial average rose by 67 points  to end the day at 14,393 and set a record closing high for the fourth straight day.  In addition, all major indexes finished the week with a two percent increase.  

The news wasn't all good, however.  The report also shows that the labor force dropped by 130,000, which was a major factor in the unemployment rate drop.  The Federal Reserve also decided today that the jobless rate is still too high, which means that they will continue to pump money into the economy and keep interest rates low.  

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Government austerity programs are also still weighing down the recovery effort.  Daniel Gross from The Daily Beast writes: 

 

The private sector added 246,000 jobs in February, while the public sector cut 10,000 positions. The reduction had nothing to do with the sequester and everything to do with the continuing grind of muted federal nonentitlement spending, and state and local needs to balance their budgets. The numbers really add up over time. Since February 2010, the private sector has created an impressive 6.35 million jobs. But since May 2010, the public sector has cut 1.148 million positions. The total jobs figures would be significantly higher, and unemployment significantly lower, if not for the continuing austerity efforts.

And of course, there are still the incoming sequester cuts, which could worsen the effect of the government sector losses later this year and cost the economy 700,000 jobs over the next two years.  Fortune's Nin-Hai Tseng notes, however, that 48,000 of the jobs in this report came from the construction sector, which is a sign that the housing market could be on its way to recovery and help offset the public sector layoffs that the sequester could bring.

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