Economy Extends Job Loss Streak

U.S. employers cut workers from their payrolls for a sixth straight month in June for the longest losing streak for the labor market since 2002, and a jump in first-time claims for jobless benefits points to more weakness ahead.

The Labor Department said on Friday that 62,000 nonfarm jobs were lost last month, bringing jobs shed for the year so far to 438,000 as housing market woes chilled growth. The unemployment rate, which shot up sharply in May, held steady at 5.5 percent.

A separate report showed new applications for jobless benefits hurdling to 404,000 last week, a level associated with recession in the past that suggests further weakness ahead for employment.

"It shows that the labor market still is very soft. We're not seeing dramatic job cuts, but clearly companies are trying to hold the line on costs," said Gary Thayer, senior economist at Wachovia Securities in St. Louis.

U.S. stock futures rallied as investors breathed a sigh of relief that the data was not even more dire. Shares were helped by a rise in the value of the dollar against the euro as the head of the European Central Bank suggested a rate hike on Thursday could be the last for awhile.

Analysts polled by Reuters had expected the unemployment rate to edge down to 5.4 percent and had expected the economy to shed 60,000 jobs.

The weak tone of the report was buttressed by downward revisions to both May and April's employment count that took their combined job losses to 129,000, compared with an early estimate of 77,000 jobs lost.