Companies are advertising more job openings than at any time in the past two years, suggesting April will mark a third straight month of strong hiring.
The 3.1 million job openings posted in February indicate that businesses are gaining more confidence in the economy. People are spending more, buying furniture, clothes and electronics and eating out. That raises corporate revenue.
High gas prices threaten the momentum, though. The national average for a gallon passed $3.80 on Wednesday.
"We've turned the corner in terms of job growth," said Scott Brown, chief economist at Raymond James. "Unfortunately, there's this big cloud of higher gasoline prices hanging over everything."
Competition for the job openings is easing, though still intense. There were 4.4 unemployed people, on average, competing for each available job in February. That's down from nearly seven in July 2009, but still above the 2-to-1 ratio in a healthy economy.
The rise in employment advertisements, reported Wednesday by the Labor Department, is the latest sign that companies are stepping up hiring. Openings jumped more than 350,000, from 2.7 million in January, the largest rise in almost seven years.
The private sector in March added more than 200,000 jobs for a second straight month, the first time that's happened since 2006. And the unemployment rate fell to 8.8 percent, the lowest in two years.
Job openings are usually filled one to three months after they're posted, which means the report can be an indicator of future hiring activity. If that holds true, April could be another strong month for job growth.
More people are also quitting their jobs, and layoffs are near the slowest in the 10 years that the government has tracked the data. That suggests people are feeling bolder about their prospects.
The brighter hiring outlook is giving people more confidence to spend.
Retail sales rose for the ninth straight month in March, the Commerce Department said. Two-thirds of the increase went to gas station sales, presumably to pay for higher gas prices. But excluding gas and the largest monthly decline in auto sales in a year, Americans still spent 0.6 percent more in March than the previous month. Auto sales can be volatile because people don't buy cars very often, so economists sometimes remove them to get a better feel for trends in retail sales.
Many analysts considered the gain solid, especially considering Easter falls later than usual this year, delaying some sales. They also noted that sales in January and February were revised to show slightly better gains. And the decline in auto sales was partly because General Motors scaled back some incentive programs.
A wide range of retail chains reported higher revenues, according to data released last week that measures stores open for at least a year. Sales rose 11 percent at Saks Inc. and 13 percent at Costco Wholesale Corp. And Victoria's Secret parent Limited Brands Inc. enjoyed a 14 percent gain.
The increased demand has businesses stocking up. A separate government report said companies added to their stockpiles in February for the 14th straight month. Inventory sales increased for an eighth consecutive month. Healthy gains in sales and inventory restocking typically lead to more demand for U.S. factory goods.
Economists expect that the Social Security tax cut, which is giving most Americans an extra $1,000 to $2,000 this year, and the improving hiring outlook will keep people shopping this year. Consumer spending accounts for 70 percent of economic activity.
"The fact that discretionary spending remains robust ... speaks to the resiliency of U.S. consumers," Joseph LaVorgna, an economist at Deutsche Bank, said in a note to clients. "An improving labor market should reinforce this backdrop."
One concern is the recent spike in oil and gas prices, which leave people with less money to spend on other things. Gas is 24 cents per gallon more expensive than it was a month ago, according to AAA. Prices have jumped since February because of Middle East turmoil.
Most analysts predict that higher prices at the pump will dampen consumer spending in coming months but not by enough to derail the economic recovery.
Still, many economists have reduced their estimates for economic growth in the January-March quarter in recent weeks. That reflects the pricier oil, which is expected to widen the trade deficit.
Earlier this week, Macroeconomic Advisers cut its forecast for growth to an annual rate of 1.5 percent from 2.1 percent. And Deutsche Bank has lowered its forecast to 2.8 percent from 3.3 percent. But both firms expect growth to pick up later this year and hiring to remain healthy.
Economic growth usually needs to be above 3 percent to create enough jobs to keep pace with population growth. It typically needs to be closer to 5 percent to significantly lower the unemployment rate.
Deutsche Bank's LaVorgna projects that private companies will add more than 225,000 jobs in April. And Ben Herzon, an economist at Macroeconomic Advisors, expects employers to keep hiring.
"We're pretty optimistic about job growth going forward," Herzon said.
AP Retail Writer Anne D'Innocenzio contributed from New York and AP Auto Writer Tom Krisher contributed from Detroit to this report.