The nation's unemployment rate unexpectedly declined last month to 4.7 percent from 4.9 percent, the lowest level since mid-2001, as the job market continued to strengthen, the Labor Department said yesterday.

"The economic expansion has matured to the point where corporate America feels it's safe to staff up," said Clear View Economics economist Ken Mayland.

The decline in the jobless rate was welcome news for most of the country. But on Wall Street, which has recently begun to hope the Federal Reserve is done or nearly done with its long series of interest-rate hikes, there were worries the latest data might spur the central bank to continue raising rates.

Strong demand for workers can send wages higher, fueling inflationary pressures. And yesterday's upbeat employment news, noted J.P. Morgan Chase & Co. economist Haseeb Achmed, "reinforces the case for continued Fed tightening."

The decline in unemployment is "probably going to spook markets more than any other recent data," echoed Well Fargo senior economist Eugenio Aleman.

The jobs report jarred the stock markets, but the impact eased as the day progressed. The Dow Jones Industrials closed 58 points lower to 10,794.

Economists said a portion of the unexpected decline probably reflects January's unusually warm weather, which bolstered employment in the construction and restaurant sectors.