Today’s jobs report showed that last month businesses added 246,000 jobs, well above the 2012 average of about 190,000 jobs per month. And while the unemployment rate fell to 7.7%, about 130,000 people left the labor force. Though the economy has now added over 2 million jobs in the last 12 months, job growth is just keeping pace with population growth – the share of the population that is employed is the same as it was in February 2012.

For businesses looking to hire, this means that it’s still a buyer’s market – but the report does support stronger growth to come in the job market and the broader economy. Data for the report were collected before the budget sequester took effect, but there weren’t signs that the anticipation of troubles in Washington held back businesses. Next month’s report will tell a more complete story of the sequester’s impact.

Some key takeaways from this morning’s report:

  • Growth in the job market is accelerating: Average private monthly job gains in the last three months were 203,000 – that’s higher than 197,000 in the three months before that, and 129,000 in the three months before that. And over the last three months, workers have been logging more hours, and taking home more pay.
  • A strong housing recovery is translating into jobs: The construction sector added 48,000 jobs last month. And strength in housing may also be helping the broader job market. New Fed data showed that home equity in the fourth quarter of last year logged its biggest increase since 2005. Consumers may be feeling wealthier and spending more, driving acceleration in job growth.
  • But people are still leaving the labor force: Demographic changes – the population is getting older, and Baby Boomers are starting to retire – can make it hard to interpret what the 130,000 person drop in the labor force last month means. But the share of prime age adults (age 25-54) who are working, a statistic that isn’t affected by demographic shifts, is the same as it was at the end of the recession – and almost 5 percentage points lower than it was before the crash. This means that the labor market and the broader economy still have a long way to go.