Services firms, including retailers, restaurants and construction companies, added jobs at a healthy pace in February, according to the Institute for Supply Management's monthly survey. An index of hiring by service companies slipped but remained near January's seven-year high.
The ISM's manufacturing survey found that factories also added workers in February, though more slowly than in January.
Strong auto sales and a steady housing recovery are spurring hiring and economic growth. So far, higher gas prices and a Jan. 1 increase in Social Security taxes haven't caused Americans to cut back on big-ticket purchases.
Across-the-board government spending cuts also kicked in March 1 after the White House and Congress failed to reach a deal to avoid them. Those cuts will likely lead to furloughs and layoffs in coming weeks.New-home sales jumped 16 percent in January to the highest level since July 2008. And builders started work on the most homes last year since 2008. Home prices rose by the most in more than six years in the 12 months that ended in January. Higher prices tend to make homeowners feel wealthier and more likely to spend.