The U.S. economy added an incredible 243,000 jobs in January, according to the report. | REUTERS Obama to Hill: 'Don't muck it up'

Markets rejoiced over a blockbuster jobs report out Friday, with stocks closing at their highest level since the 2008 financial meltdown.

Stocks rocketed after the government said the economy added 243,000 jobs in January, beating Wall Street expectations by roughly 100,000 jobs. The Dow Jones Industrial Average closed up 157 points, or 1.23 percent. The NASDAQ index leaped by 46 points, or 1.61 percent, putting it back into territory it hadn’t touched since the 2000 tech bubble.


President Barack Obama Friday seized on the jobs numbers to pressure Congress to extend the payroll tax cut for more than 160 million Americans and keep the economy improving, warning lawmakers, “Don’t muck it up!”

The monthly increase cut the unemployment rate to its lowest point in nearly three years — to 8.3 from 8.5 percent — and put some wind in the president’s sails as he heads into his reelection campaign.

Obama said the momentum would continue if average American households were assured of receiving the $1,000 tax break through the end of the year.

“The economy is growing stronger. The recovery is speeding up,” Obama said in remarks at an event in Arlington, Va., on Friday. “And we’ve got to do everything in our power to keep it going.”

Speaking about Congress, Obama added, “We can’t go back to the policies that led to the recession. And we can’t let Washington stand in the way of our recovery. We want Washington to be helping with the recovery, not making it tougher. So I want to send a clear message to Congress: Do not slow down the recovery that we’re on. Don’t muck it up. Keep it moving in the right direction.”

Calling for an extension of the payroll tax cut and continuation of unemployment insurance, Obama said, “They just need to get it done. It shouldn’t be that complicated. Now is not the time for self-inflicted wounds to our economy. Now is the time for action.”

The latest economic figures showed an uptick in manufacturing, mining, restaurant and even construction jobs that had caught many analysts off guard. Wall Street economists had projected the Bureau of Labor Statistics would report Friday the creation of 145,000-150,000 jobs and a flat unemployment rate.

The administration was careful not to gloat, with Alan Krueger, chairman of the White House Counsel of Economic Advisers, calling the report an “encouraging sign” in his measured comments.

“Today’s employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression,” Krueger said in a statement. “It is critical that we continue the economic policies that are helping us to dig our way out of the deep hole that was caused by the recession that began at the end of 2007.”

Republicans muted their criticism of the president slightly, emphasizing that their policies to slash federal regulations would foster even better performance.

“Unfortunately, these numbers cannot hide the fact that President Obama’s policies have prevented a true economic recovery,” Republican presidential frontrunner Mitt Romney said in statement. “Nearly 24 million Americans remain unemployed, underemployed, or have just stopped looking for work. Long-term unemployment remains at record levels.”

The uptick in jobs complicates the GOP argument against Obama. Presidential candidates like Romney and Newt Gingrich have recently tried to draw voter focus away from the unemployment rate, saying a better picture of the economy comes from the millions still trapped on the fringes of the economy.

But that could be a tough sell to voters who also heard comments from Romney on CNN this week that sounded less than sympathetic to their plight,”I’m not concerned about the very poor. We have a safety net there. If it needs repair, I’ll fix it.”

Earlier in the week, the nonpartisan Congressional Budget Office fed into anxieties about the economy, forecasting that unemployment would climb to 8.9 percent by the end of the year and continue past 9 percent into 2013.

That gloomy forecast could still play out — particularly if lawmakers cannot agree to extend the payroll tax cut through the end of year — but the economy appears to be picking up speed. The January report confirmed that the 200,000 jobs added in December were not a holiday fluke.

“It feels to me like businesses are starting to engage,” Mark Zandi, chief economist at Moody Analytics, said on MSNBC. “A light switch has gone off.”

Zandi predicted that if the unemployment rate holds steady and 150,000 to 200,000 jobs continue to be created each month “odds are the president will be reelected.”

The Republican pitch increasingly hinges on Obama having not done enough to dig out the economy, since unemployment is unlikely to return to a pre-recession level of 5 percent any time soon.

With gross domestic product forecasted to grow at a measly 2 percent through the year, the economy might not have enough horsepower to keep the momentum going through the November election.

“There’s welcome news in this latest jobs report as more Americans found work last month, but the fact is our unemployment rate is still far too high,” said House Speaker John Boehner (R-Ohio). “Our economy still isn’t creating jobs the way it should be and that’s why we need a new approach.”

Across an economy still considered sluggish were signs of life. Manufacturers boosted payrolls by 50,000, while construction added 21,000 and mining 10,000. Temp work — a possible sign of more hiring ahead — jumped by 33,000 jobs.

Hiring for architectural and engineering services rose by 7,000, just as work in the accounting sector ahead of tax season increased by 13,000. Health care employment grew by 31,000 and food services by 33,000.

“This is the strongest jobs report seen through the entire recovery,” University of Pennsylvania economist Justin Wolfers quickly tweeted. “It’s rare that all indicators point so strongly in the same direction.”

Some economists greeted the report with skepticism, because of revisions to earlier jobs figures.

The number of people participating in the labor force actually fell to 63.7 percent from 64 percent as the government adjusted past estimates. Because of the revisions, an additional 1.2 million are classified as having dropped out of the labor force and no longer factored into the unemployment number, contributing to its decrease.

“This is not a fundamentally positive way to see the unemployment rate fall,” said Jason Schenker, president of Prestige Economics in an email to clients.

Still, Democrats applauded the report, while noting that much work remained ahead to bring employment back to pre-recession levels.

“The economy made good progress, adding 243,000 jobs in January — the seventh consecutive month of growth over 100,000 jobs,” said Sen. Bob Casey (D-Pa.), chairman of the Joint Economic Committee, in a statement. “I am encouraged by the drop in the unemployment rate. We need this type of job growth to continue.”