The Labor Department reported that nonfarm payrolls fell by 20,000 in April far fewer than economists' predictions of a 78,000-job loss. As a result, April's jobless rate inched lower to 5.0% from 5.1% in March; economists predicted the rate to increase to 5.2% in April. The report suggests that the U.S. labor market didn't decelerate in April, with some investors now inclined to believe the economic downturn may not be as hard-felt as previously thought.

Delving into the specifics of the report, the construction and manufacturing sectors continued to slash jobs in April, but more stable arenas such as education helped to pare most of these declines. Private-sector jobs declined by 11,000 in April, lower than the 10,000 surplus estimated by the ADP national employment report Wednesday. The report also showed that employment rose by 362,000, while unemployment fell by 189,000, indicating the jobless rate fell mostly because unemployed workers got jobs in the most recent month.

Average hourly earnings increased by a penny, or 0.1%, lowering the year-over-year gain to 3.4%. The average workweek fell 6 minutes to 33.7 hours, while the factory workweek fell 18 minutes to 40.9 hours. Overtime in the factory sector declined by 6 minutes. Total hours worked in the economy dropped by 0.4%.