WASHINGTON -- Employers cut far fewer jobs in April than in recent months and the unemployment rate dropped to 5 percent, a better-than-expected showing that nonetheless reveals strains in the nation's labor market.
For the fourth month in a row, the economy lost jobs, the Labor Department reported Friday. But in April the losses totaled 20,000, an improvement from the 81,000 reductions in payrolls logged in March. Job losses for both February and March turned out to be a bit deeper than previously reported.
The latest snapshot of the nationwide employment conditions -- while clearly still weak -- was better than many economists were anticipating. They were bracing for job cuts of 75,000 and for the unemployment rate to climb to 5.2 percent.
The unemployment rate, derived from a different statistical survey than the payroll figures, fell to 5 percent from 5.1 percent in March. That survey showed more people finding employment than those who didn't.
Businesses are handing out pink slips as they cope with an economy that is teetering on the edge of a recession, or possibly in one already. A severe housing slump, harder-to-get credit and financial turmoil have forced people and businesses to be more cautious in their spending. And that has hurt the economy.
To help relieve credit problems, the Federal Reserve announced Friday that it would boost the availability of short-term loans to commercial banks to $150 billion in May from the $100 billion supplied in April. The goal is to supply a source of cash to squeezed banks so that they'll keep lending to customers.
The Fed took the action and several other moves to boost credit in coordination with the European Central Bank and the Swiss National Bank.
In other economic news, the Commerce Department reported that orders to U.S. factories rose a bigger-than-expected 1.4 percent in March, after two straight months of declines.
On the jobs front, construction companies slashed 61,000 positions in April. Manufacturers cut 46,000 and retailers got rid of 27,000. Those losses were eclipsed by job gains in education and health care, professional and business services, the government and elsewhere.
The job losses came in areas hardest hit by the housing and credit debacles.