The United States lost fewer jobs than forecast in April, and the unemployment rate dropped, signaling that the economic slowdown may be milder than the 2001 recession, Bloomberg reported.

Payrolls shrank by 20,000 workers, following a revised decrease of 81,000 in March that was larger than previously estimated, the U.S. Labor Department said today in Washington. The jobless rate fell to 5 percent from 5.1 percent in March.

Treasury notes fell and the dollar gained on speculation the Federal Reserve Board will refrain from cutting interest rates next month after seven reductions since September. An average of 121,000 jobs a month were eliminated in the first four months of the 2001 recession, compared with an average of 65,000 this year.

Economists had forecast that payrolls would fall by 75,000 in April after a previously reported 80,000 decline the previous month, according to the median of 82 projections in a Bloomberg News survey.

The Fed said it will increase its auctions of cash to banks and expand the collateral it takes on from bond dealers. The steps are aimed at alleviating strains in credit markets.

Today’s report also stated that income growth slowed last month. The economy’s 0.6 percent expansion rate over the six months through March was the weakest performance since the 2001 recession.

The April jobs report showed that factory payrolls decreased by 46,000 workers. Employers cut 61,000 construction jobs, the most since February 2007.



Service industries, which include banks, insurance companies, restaurants and retailers, added 90,000 workers, the most this year, after an increase of 7,000 in March. The advance was led by business and professional services, along with education and health jobs.

Retail payrolls declined by 26,800 after falling 19,300 a month earlier. Financial firms added 3,000 jobs, the first gain in that sector since July.