Payrolls increased more than forecast in February and thejobless rate unexpectedly fell to a five-year low of 7.7 percent, asign U.S. employers were undaunted by the budget impasse inWashington.

Employment rose 236,000 last month after a revised 119,000 gainin January that was smaller than first estimated, Labor Departmentfigures showed today in Washington. The median forecast of 90economists surveyed by Bloomberg projected an advance of 165,000.The jobless rate dropped from 7.9 percent. Hiring in constructionjumped by the most in almost six years.

Automakers and home-improvement retailers are among thoseannouncing plans to take on more staff, which will lead to gains inincomes that may help the world's biggest economy weather federalcutbacks and higher taxes. Today's data may ratchet up debate amongFederal Reserve policy makers, who are looking for “substantial”progress in the labor market to determine whether to maintainrecord stimulus.

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