U.S. employers cut a smaller-than-expected 539,000 jobs in April, the smallest amount since October, according to government data on Friday that hinted at some improvement in the labor market and the recession-hit economy.

However, the Labor Department said the unemployment rate soared to 8.9 percent, the highest since September 1983. March's payrolls figure was revised to show a decline of 699,000, compared with a previously reported drop of 663,000. Job losses in February were bumped up to 681,000 from the previously estimated 651,000.

Analysts polled by Reuters had forecast non-farm payrolls dropping 590,000 in April. The unemployment rate had been forecast to rise to 8.9 percent from 8.5 percent in March.

The report showed job losses across almost all sectors, although at a less steep pace than in the previous months. The government and education and health services sectors added jobs.

The manufacturing sector lost 149,000 jobs in April, after shedding 167,000 the prior month. Construction industries cut 110,000 jobs after losing 135,000 in March.

The service-providing industry slashed 269,000 positions after eliminating 381,000 in March.

Since the start of the recession in December 2007, the economy has lost 5.7 million jobs, the department said.

(Reporting by Lucia Mutikani, Editing by Andrea Ricci)

Unemployment Fall