A stronger-than-expected April rebound in job creation and recent dramatic discoveries of vast US oil and gas reserves are helping to lift the American economy out its long funk.

The economic good news is also drawing attention to the importance of private-sector innovation rather than government policy in fostering growth.

The Labor Department's report that payrolls rose by 165,000 jobs last month and the jobless rate fell to a four-year low of 7.5 percent does not signal strong job growth.

Yet the report offered a big sigh of relief to President Barack Obama and his Democratic allies in Congress.

It also may help blunt Republican criticism of Obama's policies and make it easier for him to give more attention to other issues on his agenda, including immigration, gun control and global warming.

At the same time, it provided the Republican Party with more support for their call for a smaller government and fewer regulations on business.

The recent jobs improvements were mostly driven by private-sector gains independent of action by the president and Congress.

Most legislative fiscal stimulus programs, begun in 2008 under President George W. Bush and expanded under Obama, have run their course. The Federal Reserve, however, continues to stimulate the economy by holding down interest rates and effectively printing money to buy government and mortgage-related bonds.

In fact, the report showed employer confidence about the economic outlook even in the face of new federal budget cuts. Economists agree that job gains would have been bigger were it not for the automatic across-the-board cuts that are beginning to take an US$85 billion bite out of government spending.

The energy sector plays a major role in global economic growth and recovery.

Recent discoveries have put the US on track to become the world's largest producer of oil and natural gas in a few years. At the same time, oil imports have fallen to a 17-year low.

The energy breakthroughs have come despite Obama's heavy emphasis on promoting renewable clean-energy sources, such as wind and solar power, for the future.

In the months and years ahead, domestic energy production "is going to be a real driver of economic growth," said economist Douglas Holtz-Eakin, a former director of the Congressional Budget Office.