US jobless rate jumps to 26-year high; 467,000 jobs lost in June

Questions about economic recovery again came to the forefront yesterday as US employers cut a larger-than-expected 467,000 jobs in June, driving the unemployment rate up to a 26-year high of 9.5 per cent.

The consensus forecast expected 363,000 lost jobs, a miss of over 100,000.

In May, only 322,000 jobs were lost, meaning job losses were considerably worse in June than in the prior month. Monthly job losses were at a record high of 741,000 in January.

Since the start of the recession in December 2007, the number of jobless people has risen by 7.2 million, the Department of Labor said.

Data reveals that the US now employs the same number of jobs it did in 2000. According to experts, the jobless rate may hit double-digits by the year end.

Now forecasts for expansion in the second half of the year depend on consumers increasing their spending. Even as consumers got larger paychecks due to the government's stimulus programme, they saved that money rather than spending it.