The housing market is recovering, auto sales are coming back and the stock market is setting records. Now the national unemployment rate has fallen to its lowest point in four years.

So the economic recovery is in full bloom, right?

Maybe, maybe not.

Unemployment fell two-tenths of a point in February to 7.7 percent, the U.S. government said Friday, the lowest since December 2008. Employers added 236,000 jobs during the month, well above the 180,000 forecast by analysts.

But while the report was welcome news after several months of uneven job growth, economists weren't quite ready to declare victory. They said the United States still faces plenty of economic uncertainties, from the federal budget cuts known as the sequester to slower growth in China, Europe and elsewhere.

"It's a little too early to break open the champagne," said Scott Anderson, chief economist at Bank of the West in San Francisco.

The outlook is also murky in California, where the recovery has lost some of its steam lately.

Until recently, the state was outperforming the national economy, creating jobs more quickly than the U.S. average. That's no longer the case. Unemployment stalled at 9.8 percent in December, statewide and in the Sacramento area. The state and local numbers for January and February will be released later this month.

"California's probably lost a little bit of its 'outperformance,' " Anderson said.

Jerry Nickelsburg, an economist at UCLA, said the latest national statistics are further evidence that the economy is improving, but not dramatically so. "I'm not jumping up and down that we're all of a sudden having accelerating growth," he said.

Nickelsburg said he continues to forecast "relatively slow growth in 2013," with improvement coming next year. That in turn will kick the California recovery into a higher gear.

"Once the U.S. economy picks up in 2014, we do expect California to be growing faster and the unemployment to be falling faster," he said.

The February jobs report showed hiring was strong in several sectors of the economy.

Anderson said he was particularly encouraged by 48,000 jobs added in construction. That figure dovetails with reports suggesting that construction and real estate are coming to life in California after the crash of 2008.

"Month over month, it's improving," said Chris Cady of The Brice Group, a home-building consulting firm in Granite Bay. "I wouldn't call it boom levels - we're still well below the peaks of '04, '05, '06. But we're on a very healthy trend."

The jobs report lifted the stock market to another record. The Dow Jones average rose 67.58 points to close at 14,397.07.

Economists said consumer confidence is picking up as 401(k)s slowly regain health. Retail sales have been good even though most Americans were hit with a 2 percent increase in payroll taxes effective Jan. 1.

"Consumers are feeling better and have been willing to open their wallets," said Sung Won Sohn, economist at California State University, Channel Islands, in a note to reporters.

Auto sales improved 12 percent last year nationally and are expected to increase 7 percent this year, according to Bank of the West. Other sectors of the retail industry are coming back, too.

At Arden Fair in Sacramento, "we had a really good January," said mall manager Tod Strain. "We had really good sales; many of the merchants were way up."

Strain, though, said he hasn't seen sales data yet from February, and he's a little concerned that the disturbing budget news coming out of Washington could put a damper on consumer spending.

Some $85 billion in federal spending cuts took effect March 1, and the impacts on the local level are just beginning to be understood. The cuts will mean unpaid furlough days for hundreds if not thousands of federal employees in the Sacramento region. Millions of dollars in social services funding will be lost.

In time, those lost federal dollars will translate into reduced retail sales and other impacts, Anderson said.

"We haven't seen the full impact of the sequestration," he said. "There will be more of a drag."

Most economists say they think the budget cuts will take a bite out of the recovery but not enough to cause another recession.

"The sequester will not derail the recovery, but it does slow it down," said economist Nigel Gault of IHS Global Insight, a forecasting firm in Colorado.

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