WASHINGTON, USA - THE world's biggest economy lost jobs for a sixth straight month in June as US employers shed 62,000 nonfarm jobs amid a lingering slowdown, a Labour Department report showed on Thursday.

The unemployment rate held steady last month at 5.5 per cent.

The volume of job losses was slightly worse than the markets had expected, as most economists had predicted that 60,000 posts were cut in June.

Employers started laying off substantial numbers of workers in January following several years of solid employment gains that were boosted by a booming housing market and confident consumers.

But the job picture has changed dramatically this year amid a housing market slump, a credit squeeze, a sharp downturn on Wall Street and rocketing oil prices which broke above a record US$146 (S$199.1) a barrel on Thursday.

The US economy has shed jobs every month of this year so far, and June's job cuts followed a loss of a revised 62,000 positions in May. The government had originally said that 49,000 jobs were cut in May.

HSBC's Mr Morris said the 'continued rate of deterioration' in the job market could see the unemployment rate peak above six per cent in coming months.

Economists say America's giant economy needs to create about 100,000 jobs every month to absorb new labour market entrants.

Analysts said the weak job reading is likely to pressure the Federal Reserve to keep interest rates on hold at 2.0 per cent despite mounting inflation concerns.

'We expect the Federal Reserve to remain on hold on the basis of weak employment among other factors. Markets are pricing in hikes after this summer,' said Mr Stephen Gallagher, an economist at Societe Generale.

The central bank had slashed its key base rate aggressively since September in a bid to fire up economic growth, but it put its rate-cutting campaign on hold last month in the face of inflation fears tied to surging oil prices.

US Treasury Secretary Henry Paulson underlined such concerns on Wednesday, saying: 'High oil prices will in all likelihood prolong our economic slowdown.' Some analysts say the economy is on the brink of a recession.

Economic growth improved to 1.0 per cent during the first quarter compared with 0.6 per cent in the fourth quarter of 2007, but momentum has slowed significantly from the blistering 4.9-per cent clip during the third quarter of last year.

Job losses were particularly heavy in the goods-producing, construction, manufacturing and service sectors last month.

A total of 43,000 positions were lost in the construction industry which has been hit hard by the housing downturn.

The manufacturing sector suffered a loss of 33,000 positions while professional and business services firms trimmed their payrolls by 51,000 positions.

The administration of US President George W Bush approved a US$168 billion economic stimulus, stuffed with tax rebates, to bolster the economy, but it has shown scant signs of helping the labour market yet.

'Monthly job losses in the 75,000 range, which we have averaged this year, don't point to an economy that is crashing and burning. But it does indicate that conditions are slowly but steadily deteriorating,' said Mr Joel Naroff of Naroff Economic Advisors.

Retailers shed 8,000 jobs while the education and health care sectors added 29,000 new jobs during June, the report showed.

A gain of 24,000 posts in the leisure and hospitality sectors also helped offset some of last month's job losses.

Average hourly wages rose 0.3 per cent in June, or six cents, to US$18.01 dollars while the average length of a workweek remained unchanged at 33.7 hours.