Businesses outside the farm sector plus federal, state and local governments continued to eliminate positions on net last month (-345,000) but the rate of job losses was the smallest since the recession worsened in Sep 2008.  
 
The data is consistent with recent business surveys suggesting the pace of contraction is slowing, and the turning point in the economic cycle is drawing near. 
 
The relatively small decline in nonfarm payrolls should be reflected in a smaller decline in industrial output when the Federal Reserve reports its May 09 estimate later this month (not least because the Fed bases its estimate, in part, on the payroll data). 
 
In the past two months, the data flow has become consistently positive, in the sense that it points to a slower rate of decline and a nearing end to the contraction phase of the cycle, helping fuel the broad-based rally across equity and commodity markets.  Today's data will reinforce that optimism, and has already sent WTI futures (briefly) back above $70. 
 
(Un)-employment is a lagging indicator.  Job losses are likely to continue even once the economy starts to expand again and will act as a (moderate) drag on growth going forward (as well as contributing to further defaults on home mortgages and consumer lending over H2 2009 and throughout H1 2010). 
 
But the payrolls report does indicate the worst of the downturn is now over.