WASHINGTON — After four straight months of encouraging signs, the nation's unemployment picture has unexpectedly darkened -- a sobering jolt to hopes that the economy was getting back on track.
The unemployment rate edged up just a notch in June, to a 26-year high of 9.5%, the government reported Thursday. But the loss of 467,000 payroll jobs made it clear that the worst economic crisis since the Great Depression was far from over.
Not only was the size of the payroll loss unexpected, it reversed a trend in which the monthly losses had been steadily shrinking from the January peak of 741,000 jobs eliminated. Those declines had raised hopes that an actual turnaround might be approaching.
No longer.
"The green shoots in the job market are hard to find," said Sung Won Sohn, an economist at Cal State Channel Islands in Camarillo.
Cutbacks came across virtually every major industry, Sohn noted.
The latest report means that since the recession began in December 2007, the ranks of the unemployed have almost doubled to 14.7 million, and that nonfarm employers have eliminated 6.5 million jobs.
The grim numbers dragged down stock markets around the world, with the Dow Jones industrial average falling 223.32 points, or 2.6%, to 8,280.74.
The report also gave Republican politicians fresh ammunition to criticize President Obama's $787-billion economic stimulus program as ineffective in creating jobs.
In a measure of just how bad the employment situation has become, the Economic Policy Institute in Washington said the current economic decline had erased the accumulated payroll growth of the last nine years.
"This is the only recession since the Great Depression to wipe out all the jobs growth from the previous business cycle," institute economist Heidi Shierholz said.
Obama administration officials called for patience and vowed to do whatever was necessary to revive the economy and the labor market.
"We're going to keep doing everything we can to offset the pain and set this economy up for a robust expansion," said Jared Bernstein, chief economist and economic policy advisor to Vice President Joe Biden.
Bernstein said he saw one large positive sign in the Labor Department's monthly report: With the June numbers, the pace of job losses for the second quarter as a whole had fallen to 436,000 a month, on average, down from an average monthly contraction of 691,000 jobs in the first quarter.
