NEW YORK (CNNMoney.com) - Job growth was a bit stronger than economists expected in March, pushing the unemployment rate back to the lowest in nearly five years, the government reported Friday.

The unemployment rate slipped to 4.7 percent from 4.8 percent, the Labor Department said, matching the low hit in January, which had been the lowest rate since July 2001.

Employer payrolls grew by 211,000 last month, down slightly from a revised gain of 225,000 in February, the department said. But that was above the average forecast of 190,000, according to a survey of economists by Briefing.com.

At the same time, wage growth was sluggish, with the average hourly wage up just 0.2 percent to $16.49, a shade less than the 0.3 percent increase economists forecast. That was just half the wage gain reported in February, which had been the third month of solid growth.

Average wages are up 3.4 percent over the last 12 months, just below the 3.6 percent rise in retail prices over the 12 months ending in February, suggesting that hourly workers are not keeping up with inflation.

Still, the more modest gain in wages was seen as a positive for financial markets, where investors are concerned that an overheating economy could force the Federal Reserve to keep raising interest rates beyond its May 10 meeting in an effort to control inflation.

"With a fall in the yearly rise in average hourly earnings, both investors and policy-makers can avoid pushing the panic button for a little while longer," said Anthony Chan, chief economist for JPMorgan Private Client Services. "In other words, while a (May interest rate hike) remains all but assured, this report did little to nail further tightening beyond this stage."

The Fed has said future rate hikes will be based on economic readings such as the jobs report.

Friday's jobs report helped stocks open higher, though markets had turned lower by midday.

But Treasury prices were lower after rising right after the report, pushing the yield on the 10-year note to 4.96 percent, the highest in nearly four years. Bond prices and yields move in opposite directions.

In remarks at the White House Friday morning, President Bush said the latest jobs report was a sign of solid economic revival and said the administration policy of tax cuts was at least partly responsible for the 31 straight months of jobs growth.

He called on Congress to extend the tax cuts that are due to expire and also to restrain spending. Efforts to reach agreement and vote on an a tax cut extension by Congress' Easter recess failed Thursday evening.

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