62,000 lost jobs in June

WASHINGTON - The nation lost jobs for a sixth month in a row in June, a storm of pink slips drenching this year's Fourth of July holiday for more than 60,000 Americans and leaving thousands of others worried about the future. 

   Weighed down by energy prices and the housing crunch, employers laid off workers in stores, factories and forsaken building sites.

   With more job cuts expected in coming months, there's growing concern that many people will pull back on their spending later this year when the bracing effect of the tax rebates fades, dealing a dangerous setback to the shaky economy. These worries are rekindling fears of a recession.

   "The deteriorating jobs climate will dampen many a barbecue this weekend. It's hard to celebrate when you are out of a job," said Richard Yamarone, economist at Argus Research.

   Employers got rid of 62,000 jobs in June, bringing total losses so far this year close to a half-million - 438,000, according to the Labor Department's report released Thursday. The economy needs to generate more than 100,000 new jobs a month for employment to remain stable.

   The jobless rate held steady at 5.5 percent after jumping in May by the most in two decades. Still, June's jobless rate was considerably higher than the 4.6 percent of a year ago. The unemployment rate is expected to climb through the rest of this year and top 6 percent early next year.

   In the past few days, Chrysler LLC said it would close a plant, and Starbucks Corp. said it would shut about 600 stores in the next year, meaning more lost jobs ahead. American Airlines said this week it could cut up to 900 flight attendant jobs and many more job cuts, likely totaling more than 6,000, are likely as the nation's biggest airline tries to survive record high fuel costs.

   There were 8.5 million unemployed people as of June, up from 7 million a year earlier. Heavy job losses were reported in construction, manufacturing and financial services - the worst casualties of the housing, credit and financial debacles. Cutbacks also came in retailing, temporary help, trucking, publishing and elsewhere. That more than swamped job gains in other places including health care, education, hotels, bars and restaurants and the government.

   Other economic news revealed more weak spots.

   - The number of newly laid-off people signing up for unemployment insurance rose sharply last week. New applications jumped by 16,000, to 404,000, the highest level since late March.

   - The nation's service sector - generally an engine for the economy - contracted in June. The Institute for Supply Management's index of the service sector fell to 48.2 in June from 51.7 in May. A reading below 50 signals activity is shrinking, while a reading above that suggests activity is expanding.

   "The economy will get worse before it gets better," said Sung Won Sohn, an economics professor at California State University.

   On Wall Street, investors took the latest batch of economic reports in stride. The Dow Jones industrials closed up 73.03 at 11,288.54.