Great news for the job market, the U.S. economy added 165,000 net new jobs last month and the unemployment rate dropped to 7.5 percent, its lowest level in more than five years, the Labor Department said in a report released Friday.

Jobs added in April exceeded analyst expectations of about 148,000 net new jobs and helped counter concerns that hiring was significantly slowing after a disappointing report in March. The government also revised upward job numbers for the previous two months, putting the payroll gain at 138,000 for March and 332,000 for February.

The initially disappointing 88,000 figure for March was revised to a more respectable 138,000. The February figure was revised up to 332,000 from the initial report of 268,000. That was the most new jobs added in a month since May 2010.

The better-than-expected data sparked a surge in US stocks, with the key indices jumping one percent on the news, while the dollar, after a brief spike higher, headed lower again.

"Now is not the time for Washington to impose self-inflicted wounds on the economy," said Alan Krueger, chairman of the White House's Council of Economic Advisers in a statement.

"The administration continues to urge Congress to replace the sequester with balanced deficit reduction, while working to put in place measures to create middle-class jobs, such as by rebuilding our roads and bridges and promoting American manufacturing."

In April, more Americans said they had part-time jobs even though they wanted full-time work. That figure rose 278,000 to 7.9 million, reversing a steep drop the previous month.