INSTANT VIEW: U.S. payrolls fall, but less than expected

NEW YORK (Reuters) - U.S. employers cut jobs for a fourth straight month in April, though not as vigorously as feared, according to a government report on Friday that also showed an unexpected improvement in the unemployment rate last month.

KEY POINTS: * The Labor Department said 20,000 jobs were shed last month, far fewer than the 80,000 that economists surveyed by Reuters had anticipated would be lost. That followed upwardly revised losses of 81,000 jobs in March and 83,000 in February. Employers also cut 76,000 jobs in January. * The unemployment rate eased to 5 percent in April from 5.1 percent, contrary to forecasts that it would pick up to 5.2 percent.

COMMENTS:

JOHN SILVIA, CHIEF ECONOMIST, WACHOVIA, CHARLOTTE, NORTH CAROLINA:

"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.

"It allows the fed time to look at the data, observe the flow of the economy, and probably not lower interest rates at the June meeting

IAN SHEPHERDSON, CHIEF U.S. ECONOMIST, HIGH FREQUENCY ECONOMICS, VALHALLA, NEW YORK:

"The net payroll revision was just -8K. This is a blip against a deteriorating trend, though don't expect the bulls on the Street to see it that way. All the payroll improvement was in the service-providing sector, where business services rose 39K, compared to the prior three-month average of minus 34K. This is noise, perhaps due to Easter seasonal problems; the seasonal factor was 81K bigger than in April 07. Note that construction (-61K) and manufacturing (-46K) were together a bit worse than March. Elsewhere, hours down a hefty 0.4%, overtime hours down too. Expect much weaker headlines in May."

KIM RUPERT, MANAGING DIRECTOR, GLOBAL FIXED INCOME ANALYSIS, ACTION ECONOMICS LLC, SAN FRANCISCO:

"Obviously it was better than the market's expectations for something a lot worse. It is still showing that payrolls are declining but not quite the pace that would be consistent with a recession or the collapsing economy that many continue to fear."

"I think bond yields have to continue higher. The market had been pricing in a worst-case scenario and we're just not seeing that. Assuming this props equities as it's doing currently I think we will see further money come out of Treasuries and go back into riskier assets. It looks like the dollar could get a little support as well."

DAVID SLOAN, ECONOMIST, 4CAST LTD, NEW YORK:

"It is better than expected, but it is still a mixed bag. Certainly the payrolls numbers are quite encouraging. I don't know that it is strongly persuasive that the economy is turning a corner -- it will reduce pessimism rather than increase optimism. The fall in the unemployment rate is also encouraging. It is reasonably encouraging on both the inflation and outlook front for the Fed."

PIERRE ELLIS, SENIOR ECONOMIST, DECISION ECONOMICS, NEW YORK:

"There was a comparatively restrained decline in overall employment in April, mainly the result of a sharp upward swing in business service employment. Meanwhile there's a drop in the average workweek so it turns out that actual labor usage fell in April. It looks as if employers are being cautious about cutting employment too severely. This may well show a pattern of increased use of outside service providers as the outlook becomes more uncertain. There's ongoing severe weakness in areas that have been weak for sometime such as construction and manufacturing. Most of the service industries also continue to be weak. Any stabilization in the labor market that the report suggests is highly tenuous and labor income remains under pressure."

GEORGE ADELL, FIXED INCOME STRATEGIST, COMMERCE CAPITAL MARKETS INC., JUPITER, FLORIDA: