US employers cut workers from their payrolls for the sixth straight month in June for the longest losing employment streak since 2002, government data on Thursday showed. A separate report showed new applications for jobless benefits hurdling to 404,000, suggesting further weakness ahead for employment. US stock futures rallied on the news, while prices on US government debt retreated as investors shifted their attention toward the equities market. “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. The Labor Department said the unemployment rate held steady at 5.5 percent in June and 62,000 jobs were lost from non-farm payrolls, bringing jobs shed for the year so far to 438,000 as housing market woes chilled growth. Analysts polled by Reuters had expected the unemployment rate to edge down to 5.4 percent. Payrolls were forecast to shed 60,000 jobs in June versus a 62,000 loss in May. Both May and April's count were revised lower, taking their combined job losses to 129,000, compared to an early estimate of 77,000 jobs lost. Average hourly earnings, closely watched by the Federal Reserve as it monitors price pressures to make sure they do not creep into higher wages, edged up six cents, or 0.3 percent in June to $18.01. This took the year-on-year gain in average hourly earnings to 3.4 percent, the lowest reading since January 2006. The Fed last week halted an aggressive interest rate cutting campaign, holding rates at 2 percent and warning that inflation risks had risen amid soaring energy and food prices. The central bank had been cutting rates to shield growth from a collapsing housing market. “It does show that the Fed has to hold policy steady for now. We've now seen job cuts all year long and that suggests that raising interest rates now would probably hurt the economy significantly,” said Thayer. June's decline was also the longest consecutive monthly shrinkage in payrolls since the collapse of the technology stock bubble, when they fell from March 2001 until May 2002 without respite as the economy went through a mild recession.
