GLOBAL MARKETS-U.S. jobs data hits stocks, boost bonds

LONDON, Sept 5 (Reuters) - European stocks extended losses and Wall Street looked set for a negative start on Friday after U.S. jobs data showed the labour market had deteriorated more than expected.

Demand for government bonds rose. The dollar fell against the euro at first then rose.

The U.S. Labor Department said the U.S. unemployment rate shot up to 6.1 percent in August, its highest in more than 4-1/2 years, and employers cut payrolls for an eighth straight month with 84,000 jobs lost.

Economists surveyed by Reuters had forecast a loss of 75,000 jobs ECON.

"This is more convincing evidence that the economy is still in trouble and investors are seeking safer places to park their money," said Gary Thayer, senior economist at Wachovia Securities in St. Louis.

The FTSEurofirst 300 index .FTEU3 was down 2 percent while a euro EUR= fetched $1.4248 EUR=.

(Editing by Ruth Pitchford)