European shares close lower on rise in US jobless

* FTSEurofirst 300 closes 2.6 percent lower

* U.S. jobless well above forecast; ECB holds rates

* Elan soars after J&J takes stake

By Brian Gorman

LONDON, July 2 (Reuters) - European shares closed lower on Thursday after U.S. employers cut far more jobs than expected, casting further doubt on the strength of economic recovery.

The pan-European FTSEurofirst 300 .FTEU3 index fell 2.6 percent to close at 843.0 points, the day's low.

The European benchmark index is still up more than 30 percent from its lifetime low of March 9, but the rally has stalled in recent weeks.

The U.S. labour market continues to struggle with a deep recession. The loss of 467,000 jobs in June compared with the 363,000 consensus of Wall Street economists polled by Reuters and broke a four-month trend of moderation in job losses.

The unemployment rate rose to 9.5 percent, though initial claims fell by 16,000 last week. [ID:nN02549309]

"Clearly the market is concerned about the unemployment data," said Mike Lenhoff, chief strategist at Brewin Dolphin Securities, in London. "And there's a sense of disappointment at the inability of the market to sustain the momentum to hold key psychological levels."

The Euro zone jobless rate, also 9.5 percent, was a 10-year high in May, data showed on Thursday. [ID:nL2714438]

The European Central Bank kept euro zone interest rates at 1.0 percent, bolstering expectations they will stay there well into next year, and said it would start buying bonds next week.

ECB President Jean-Claude Trichet gave no sign the ECB was planning to move rates from the current record low level soon, saying they remained "appropriate". He left the door open for further cuts if needed. [ID:nL2512532]

The rate decision had been predicted.

Earlier Sweden's central bank shocked markets though by cutting its interest rates by a further 25 basis points to 0.25 percent. [ID:nL2601049]