New York, May 2: Many Americans earned less in April, the US government said today, as the economy shed 20,000 jobs, the fourth consecutive month of decline. The drop in payrolls was less severe than expected, but businesses and employees continued to feel the effects of a widespread downturn.

Economists had been bracing for a decline of up to 85,000 jobs, in line with the rate of losses over the first three months of the year. Instead, service industries like restaurants and medical care recorded a surge of new hires, according to the Labour Department.

The unemployment rate dropped as well, to 5 per cent from 5.1 per cent in March, as a separate survey of households, which is considered more volatile, showed that employment actually rose last month. It is not uncommon for the two surveys to disagree. But many businesses struggled. Manufacturers and construction companies, which have been battered by the housing slump, shed nearly 110,000 in April, the report said.

Americans also appear to be working fewer hours, and for less pay. The percentage of employees who involuntarily turned to part-time work rose to the highest level since 1995. “Recessions in the job market don’t just hurt people who get laid off; they hurt incumbent workers by taking a big bite out of their hours and wages,” said Jared Bernstein of the Economics Policy Institute in Washington.

Among rank-and-file workers, who make up more than three-quarters of the work force, average weekly pay fell $3.55 to $602.56, when adjusted for inflation. This figure has been generally falling since the end of 2006, when it peaked at $610.50. Since then, nominal pay gains have slowed as the job market has weakened, and inflation has risen, crimping families’ buying power. “The softening of the job market has taken a major bite out of wage growth,” Bernstein said.

In addition, some companies may be avoiding layoffs by cutting back on employee hours. The number of hours worked fell in April, by 0.3 per cent among private employers, the second decline this year. The unemployment report is likely to be seized on as evidence that the focus of the US Federal Reserve should switch to curtailing inflation, rather than fighting off a recession that may be less severe than first thought.

The Labour Department also revised its figures for March and February, reporting that an additional 8,000 jobs were lost over that period.