Economy likely shed 60,000 jobs in June

By Steven C. Johnson

NEW YORK (Reuters) - The economy likely suffered its sixth consecutive month of job losses in June as the worst housing slump in generations, and ongoing stress in manufacturing and banking discouraged businesses from hiring.

Economists polled by Reuters estimated that employers cut 60,000 jobs in June after losing 49,000 the prior month.

If the economy does shed jobs in June, it would be the longest losing streak since June 2002, which marked the end of a 15-month run of payroll declines after the 2001 recession.

"Nonfarm payrolls have been contracting for the past five months and June should be no exception," wrote Meny Grauman, an economist at CIBC World Markets, wrote in a research note, adding the steady stream of declines points to recession.

"No job losses of this magnitude have ever left the general economy unscathed."

The biggest cuts were thought likely to be concentrated in manufacturing, construction and financial services.

Some economists feared an even more gloomy report for June after ADP Employer Services said on Wednesday that private sector employers slashed 79,000 jobs last month, far more than the 20,000 decline markets were expecting.

The more comprehensive government report includes private and public sector employment.

If recent history is any guide, said Ian Shepherdson, chief U.S. economist at High Frequency Economics, the ADP report could signal an astounding drop of 200,000 jobs in the official payroll numbers.

"Expect a weak official (payrolls) report tomorrow," said Shepherdson, who is based in Valhalla, New York.

Economists polled by Reuters are looking for the unemployment rate to ease to 5.4 percent after spiking in May to 5.5 percent, its highest in more than 3-1/2 years.

"Despite this decline in joblessness, the unemployment rate is on a rising trend that will take it above 6 percent by year-end," said Steven Wood, chief economist at Insight Economics in Danville, California.

The non-farm payrolls report is due at 8:30 a.m. ET on Thursday.

Here is a selection of comments from economists:

CIBC WORLD MARKETS: