Job cuts in April less severe than feared
WASHINGTON (Reuters) - The 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 on 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 lost 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."
Major stock indexes initially climbed on the jobs report but finished mixed on a jump in oil prices and disappointing results from Sun Microsystems Inc (JAVA.O), the world's fourth-largest business computer maker.
The Dow Jones industrial average rose 48.2 points to close at 13,058.2 while the tech-laden Nasdaq Composite Index fell 3.72 points and ended at 2,476.99.
Prices for U.S. Treasury bonds were broadly lower as investors bet the jobs report raised chances the Federal Reserve will be able to pause its rate-cutting campaign.
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 U.S. 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 since the department started records in 1992.
Attention focused on the jobs report, though, since it offered one of the first looks at second-quarter performance and as it surprised markets that had been braced for worse.
President George W. 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. Continued...
