WASHINGTON -- The U.S. economy lost jobs for the fourth month in a row in April but at a slower pace than earlier in the year, easing fears that the economy was at a growing risk of slipping into a deep recession.
The Labor Department said Friday that 20,000 jobs were shed last month, far fewer than the 80,000 that economists had anticipated. The national unemployment rate, which is compiled from a separate survey, unexpectedly fell to 5 percent from 5.1 percent in March.
Since 2008 began, some 321,000 jobs have been cut from payrolls, yet the economy expanded slightly during the first quarter and factories are still getting enough orders to keep hope alive that growth may gain momentum later in the year.
"The economy is just barely treading water," said Richard Yamarone, chief economist for Argus Research in New York, after the jobs figures were issued. "It's not imploding but it's not desirable either."
Stocks initially rose on the jobs report but turned negative in the afternoon on reports of rising oil prices and pressured corporate earnings. Bond prices fell as investors bet the jobs report raised chances the Federal Reserve will be able to pause its rate-cutting campaign.
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The dollar's value hit a two-month peak against a basket of other currencies. "The market likes the U.S. jobs report and most are thinking that if we do slip into a recession, it's going to be mild and brief," said Matt Kassel, director of foreign exchange at ING Capital Markets in New York.
FACTORY ORDERS JUMP
A report at mid-morning from the Commerce Department, showing a stronger-than-expected 1.4 percent rise in March factory orders, added to the positive market tone.
Forecasts had called for only a slight 0.2 percent rise in March orders. The report also showed, however, that inventories of unsold manufactured goods climbed to the highest level since the department started records in 1992.
Attention focused on the April jobs report, though, since it offers one of first looks at second-quarter performance and because it surprised markets that had been braced for worse.
President Bush, speaking after touring a technology company in St. Louis, conceded the job losses showed a weakened economy but insisted it remained resilient.
"That's a sign that this economy is not as robust as any of us would like it," Bush said.
The four-month string of job losses since 2008 began is the longest since a five-month stretch in 2003, when the economy was in a jobless recovery from the last recession in 2001.
In a telephone interview, Commerce Secretary Carlos Gutierrez described the report as "bittersweet" since it still reflects a weaker job environment. "I'm just so glad that we are right in the middle of sending out economic stimulus checks to consumers right now that should spur activity," he said.
CHECKS IN THE MAIL
The Bush administration began making direct deposits this week of up to $600 for individuals and $1,200 for couples as part of an economic stimulus program approved by Congress earlier this year.
Analysts said moderating job losses, if continued, may mean an economic downturn will be less severe but it still depends upon avoiding a seize-up of stressed credit markets.
"What you get a sense of is that people have been coming into this in recent months with the idea that this was a horrendous recessionary calamity, and I think what we're coming to find out is that this looks more like a mid-cycle slowdown," said Jim Paulsen, chief investment officer for Wells Capital Management in Minneapolis.
John Silvia, an economist with Wachovia Bank in Charlotte, North Carolina, said the jobs data gave the Fed some breathing-room to assess the impact of substantial rate cuts it already has made.
"I think the employment decline was less than expected and consistent with a modest slowdown in the U.S. economy, possibly a recession, and I think it will allow the Fed time to look at the data going forward," Silvia said.
Just before the April employment figures were issued, the Fed announced fresh action to add liquidity to credit markets, increasing the size of some cash auctions for financial institutions as well.
The Labor Department said 61,000 construction jobs were lost in April, the largest number for that sector since 103,000 were cut in February 2007. The department said since peaking in September 2006, some 457,000 construction jobs have been lost.
Both the number of hours worked and overtime hours fell slightly in April from March, a sign employers were making every effort to keep a tight lid on employment costs.
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