US EMPLOYERS laid off workers for a fourth consecutive month in April as businesses reined in spending. But overall job losses were far less severe than most economists had feared. Non-farm payrolls fell by 20,000 - significantly better than consensus expectations of about 75,000 job cuts - following a revised 81,000 reduction in March.

The unemployment rate, based on a survey of 60,000 households, dipped from 5.1 per cent to 5 per cent. Economists had forecast the rate to rise to 5.2 per cent.

While most analysts think the US economy fell into recession at the start of this year, job losses so far have been low compared with previous downturns. "The employment data continue to point to the economy being in recession but, at this point, the recessionary forces from the overall labour market do not appear to be intensifying," said John Ryding of Bear Stearns.

The US economy shed 260,000 jobs in the first third of this year - an average monthly rate of 65,000. This compares with an average of 121,000 jobs lost each month at the start of the 2001 recession, and 123,000 a month over the same period in 1990. Job cuts may be less severe because there is less spare capacity in the workforce.

"Employers were much more lean and mean in terms of how they built up their staffing in this [economic] recovery compared to others, so we may see fewer layoffs for that reason," said Jared Bernstein, an economist at the Economic Policy Institute.

Many analysts do not expect unemployment to rise above 6 per cent this year, compared with a peak of 7.8 per cent in 1992 and 6.3 per cent in 2003.

Investors were cheered yesterday by a stronger-than-expected increase in March factory orders, which rose by 1.4 per cent, compared with forecasts of a 0.3 per cent rise. - (Financial Times service)