WASHINGTON — The pace of job losses slowed considerably during the month of April, adding to hopes that the nation's steep economic downturn may be nearing a bottom.
Employers cut 539,000 jobs last month, the fewest in six months and significantly fewer than the 699,000 jobs that had been lost the previous month, the U.S. Labor Department reported Friday.
Still, the job market for Americans is difficult and getting worse. The nation's unemployment rate climbed to 8.9% in April, the highest since 1983 and up from 8.5% the previous month.
"We pulled the cord and the parachute was packed. We're still falling, but we're not in free fall anymore," said Diane Swonk, chief economist for Chicago-based Mesirow Financial.
The employment situation in April was better than expected -- most economists had predicted payrolls would drop by about 620,000 -- and was one of several glimmers of hope that had recently appeared after months of unrelenting dark news on the economy.
Gross domestic product figures released last week showed consumer spending rebounding during the first three months of the year after two consecutive quarters of steep declines. The Conference Board's consumer confidence index surged in April, its second monthly rise in a row, after a nearly uninterrupted decline since August 2007. Pending home sales rose in March, also for the second straight month.
So-called stress tests of the nation's largest banks issued by the Federal Reserve this week showed that most were returning to health. That's an encouraging sign for the battered financial system, whose soundness is key to a revival of the larger economy.
The employment news bolstered burgeoning hopes among investors that the worst of the recession was over. The Dow Jones industrial average soared 164.80 points, or 2%, on Friday to 8,574.65.
Since hitting 12-year lows March 9, major stock indexes have rallied; the Standard & Poor's 500 index is up 37.4% while the Dow has gained 31%.
Federal Reserve Chairman Ben S. Bernanke gave one of the most optimistic forecasts earlier this week, saying the economy may begin to grow again before the end of the year -- although he acknowledged that job losses could continue into next year.
The economy is likely to receive further support in the months ahead as the Obama administration's $787-billion stimulus package flows into the economy, said Gus Faucher, director of macroeconomics for Moody's Economy.com.
