All told, U.S. employers added 262,000 jobs last month, the most since October, the Labor Department reported yesterday.

"Businesses are growing increasingly confident in the economy, and we're beginning to see more aggressive hiring," said Stuart Hoffman, chief economist at PNC Financial Services Group. "Companies are starting to put their money where their mouth is."

Perhaps sensing that, more job seekers returned to the hunt, and that helped push the unemployment rate higher.

The overall civilian unemployment rate, which comes from a separate statistical survey from the payroll figures, rose to 5.4 percent in February from 5.2 percent in January.

"I think it indicates more people are feeling that it's actually worthwhile to start job-hunting again," said Bill Cheney, chief economist at John Hancock Financial Services.

On Wall Street, investors welcomed the report. The Dow Jones industrials shot up 107.52 points to close at 10,940.55, their best finish in 3 1/2 years.

President Bush celebrated, too. "The economy's getting better," he said. "Today we got some good news."

Bush — who faced questions from Democrats and other critics about the job market throughout his first term in office — is looking for improvement as he pursues an overhaul of Social Security and of the nation's tax code.

February's payroll gain was nearly double the 132,000 jobs added in January.

In other economic news yesterday, U.S. factories saw orders for goods rise by 0.2 percent in January, following a 0.5 percent rise in December. Gains in January reflected stronger demand for "nondurable" goods, such as food, leather products and chemicals.

Economists believe the economy in the January-to-March quarter is growing at a rate of around 4 percent, a sufficient pace for solid — but not spectacular — job creation.

Against that backdrop, economists believe Federal Reserve policy-makers will stick with their measured approach to raising interest rates. The Fed has boosted rates six times, each by one-quarter point, since June 2004. Another increase of that size is expected March 22.

For workers and jobseekers, the employment climate can still be somewhat trying.

Workers' average weekly earnings held steady in February at $535.83. Analysts said they would keep a close eye on the direction of wages and how consumer spending, the economy's lifeblood, fares in the coming months.

The report said there were 8 million people unemployed in February with the average duration of 19.1 weeks, down slightly from 19.3 weeks in January.

The nation's manufacturers added 20,000 jobs in February after five straight months of losses. Employment gains in the manufacturing of motor-vehicles and parts accounted for about half of the increase, the government said.