The US economy created 274,000 jobs in April, surpassing the most upbeat forecasts and raising hopes that the recent slowdown in growth will prove shortlived.

In addition to showing strong gains last month, yesterday's figures indicated that employment growth in previous months was 97,000 higher than previously reported.

The job growth was relatively broad-based, with 17,000 net new jobs in financial services, 24,000 in retail, 39,000 in transport and 45,000 in construction.

Only the embattled manufacturing sector continued to disappoint, shedding 6,000 jobs.

The strong job growth helped keep the unemployment rate at 5.2 per cent.

Financial markets moved quickly to brace for more aggressive monetary tightening from the Federal Reserve this year.

Sean Crowe, director of trading, Bank of Ireland Global Markets said: "US treasuries sold off sharply on the back of an unambiguously strong employment report, which helped ease fears of a slowing US economy."

He said shorter-dated maturities were the worst hit, as the market priced in a higher path for the federal funds rate.

Longer maturities were more insulated, due to confidence that an active Fed would prevent a serious rise in inflation.

Yesterday's move reverses the gains of the last couple of weeks, and may set the scene for a resumption of the overall trend towards higher yields, he said.

"These figures show that the recent soft patch has not shaken the confidence of companies or undermined the basic strength of the US economy," said Bruce Kasman, chief economist at JP Morgan.

"Companies are still well-placed to continue to be the main engine of growth by hiring and increasing wages."

The employment figures come after a stream of weak economic releases pointing to an abrupt slowdown in consumer spending, sluggish wage increases and weakening business investment growth.

Some economists are coming to believe that at least part of the weakness in March was due to problems with seasonal adjustments, since the Easter break fell in March rather than April.

Although the figures provided an antidote to the recent gloom over the economy, some economists observed that the US was not out of trouble yet.

"The jobs figures are strong but consumer confidence is still weak and business investment slowing," said Ryan Wang, US economist at HSBC in New York.