Despite the negative figure on payrolls, the report was better than expected by private economists, who on average had called for a loss of 75,000 jobs and a jobless rate of 5.2 per cent.

'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 agency made small revisions to prior data to show a drop of 81,000 jobs in March from 80,000 and a decline of 83,000 in February, some 7,000 more than in the earlier estimate.

The report, seen as one of the best indicators of economic momentum, comes amid fears that the world's largest economy may be headed for recession after being battered by a horrific decline in housing and a related credit squeeze.

Yet the first-quarter report on US gross domestic product showed a small increase of 0.6 per cent.

The employment report showed the economy still hurting from the housing crisis. Construction shed 61,000 jobs and manufacturing lost 46,000.

That was offset in part by a gain of 37,000 in health care, and 27,000 in professional and technical services.

The retail secotr however lost 27,000 jobs.

Average hourly earnings, a key sign of wage-driven inflation, rose a modest 0.1 per cent compared with analyst expectations of a 0.3 per cent gain. -- AFP