US job losses surged to 467,000 in June, pushing the unemployment rate to a new 26-year high of 9.5 percent, according to data Thursday that dampened hopes for an early recovery from recession.

The Labor Department report, seen as one of the best indicators of economic momentum, reversed the improvement seen last month when job losses fell to a revised 322,000.

Analysts had expected a smaller June number of 365,000 job losses, but a higher unemployment rate of 9.6 percent. The jobless rate in May was 9.4 percent.

"The disappointing report highlights the severity of the downturn and suggests a bottom for employment is not near," said Sophia Koropeckyj at Moody's Economy.com.

"The labor market's struggles continue, and there is little indication that conditions are improving."

Meny Grauman, economist at CIBC World Markets, said some analysts have gotten ahead of themselves in anticipating an economic recovery.

"This shows the recession lives on in the United States," he added.

"It's a question of the pace of decline and not recovery. The economy continues to contract at a slower pace than at the beginning of this year, but it's still a steep ride."

Since the recession began in December 2007, the world's biggest economy has lost 6.5 million jobs and the jobless rate has risen 4.6 percentage points.

"The disappointment was not just the size of the job losses but the fact that they were so widespread," noted Sal Guatieri at BMO Capital Markets.

"The outlook is still uncertain so companies are reluctant to hire even if demand is picking up."

Guatieri said the economy's troubles suggest a risk of a self-reinforcing downward spiral fed by weak demand that leads to job cuts and lower incomes, cutting consumer spending that is the lifeblood of the economy.

"This is just one month's report but if it is followed by another disappointing report in July we might have to revise our figures downward for the third quarter" for the US economy.

The report showed employment in manufacturing fell by 136,000 over the past month, boosting the total for the recession to 1.9 million job losses.

The key services sector lost 244,000 jobs including 21,000 in retail last month, the report showed.

All sectors showed job losses except education and health care, which gained 34,000 in June.

Another disappointment was that average hours worked in the private sector -- sometimes seen as a proxy for economic activity -- fell 0.8 percent in June, while overall incomes were flat.

"Wages will soon be falling outright, a classic deflation signal," said Ian Shepherdson, economist at High Frequency Economics.

In a separate report on weekly jobless claims which provides one of the freshest indicators of economic sentiment, the Labor Department said the number of new claims fell by 16,000 to 614,000 in the week ending June 27.

The four-week moving average for new claims was 615,250, a decrease of 2,750 from the previous week's revised figure.

The update showed a decrease in the number of people receiving unemployment benefits by 53,000 to 6,702,000 in the week to June 20.

The US economy shrank at a 5.5 percent pace in the first quarter, based on the lastest official estimate, following a 6.3 percent slide in the fourth quarter of 2008 -- representing the worst slump in decades, resulting from the collapse of a housing bubble and global credit squeeze.

President Barack Obama warned last month ago that "it's pretty clear now that unemployment will end up going over 10 percent" and said it would take time for an economic recovery to translate into job growth.