US job figures have surprised Wall Street, falling less than expected and shifting the balance of opinion towards analysts not predicting a recession.
The US economy lost 20,000 jobs in April, according to non-farm payrolls figures from the Labor Department.
Earlier in the week, the Federal Reserve cut interest rates, but reduced its stress on the risks to the economy.
As a result of the upbeat news, the Dow Jones Industrial Average stock index closed 48 points higher on Friday.
Big improvement
US Treasury bond prices fell sharply when the unemployment figures were released, as they suggest the economy may not be faring as badly as had been thought and investors decided that interest rate cuts may now be put on hold.
"It looks as if employers are being cautious about cutting employment too severely"
"Job losses are way below the recession norm for this point of business cycle, if this is recession," said Robert Brusca at FAO Economics.
"Many things do not really add up for the recession forecasters."
The payrolls figure was a big improvement from the 81,000 jobs lost in March and comes just as consumers are receiving their tax rebate cheques as part of the government's stimulus package.
At the same time, the jobless rate fell to 5% from 5.1% in March, when it had been expected to increase to 5.2%.
"It's a lot better than expected, both in terms of the non-farm payroll number and the unemployment rate, so it looks like the economy is in better shape than we thought," said Owen Fitzpatrick of Deutsche Bank Private Wealth Management.
"It's a positive, but I don't think it'll be a blowout positive."
"This will alleviate some of the concerns that we're in for a steep reduction in employment and a prolonged, drawn-out recession."
US President George Bush expressed disappointment that the unemployment figures were rising, saying it was "a sign that this economy is not as robust as any of us would like it".
But he stressed that it remained "resilient".
"This economy is going to come on, I am confident it will," he told an audience in Missouri.
Cautious employers
One of the big areas of job growth in April was professional and business services, while there was a small fall in the average number of hours worked per week to 33.7.
"It looks as if employers are being cautious about cutting employment too severely," said Pierre Ellis at Decision Economics in New York.
"This may well show a pattern of increased use of outside service providers as the outlook becomes more uncertain," he added.
While the payroll figure was better than had been expected, it was still the fourth consecutive month of falls as the economy continued to slow.
The drop meant it was the worst run of negative payrolls figures since the five month run from February to June 2003.
"This is a blip against a deteriorating trend, though don't expect the bulls on Wall Street to see it that way," said Ian Shepherdson of High Frequency Economics.
Key sectors
"All the payroll improvement was in the service-providing sector," he said, pointing to a 61,000 decline in jobs in construction, and a 46,000 slide in manufacturing jobs.
"Expect much weaker headlines in May," he warned.
Other analysts also voiced concerns about the strength of employment in some industries, such as retailing, which lost 27,000 jobs.
"If you isolate the cyclical industries, employment is dropping quite quickly," said Avery Shenfeld at CIBC World Markets.
"It's still not a sign the labour market is healthy."
Factory orders
There was more good news for the US economy in the latest factory goods orders.
Orders placed with US factories rose 1.4% in March following two months of falls.
The figures were better than had been expected, with much of the growth coming from non-durables, a category excluding big-ticket items such as cars and machinery.
Non-durables grew 2.6% while durables only rose 0.1%.
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