GLOBAL share markets plunged yesterday after US employers cut a larger-than-expected 467,000 jobs in June, driving the unemployment rate up to a 26-year high of 9.5%.

GLOBAL share markets plunged yesterday after US employers cut a larger-than-expected 467,000 jobs in June, driving the unemployment rate up to a 26-year high of 9.5%.

The heavy US job losses suggested that the road to recovery for the world's biggest economy will be bumpy as the effects of a big federal governemnt stimulus package start to fade.

The Labour Department report showed that even as the slump shows signs of easing, companies likely will want to keep a lid on costs and be wary of hiring until they feel certain the economy is on solid ground.

"This will be another jobless recovery," said John Silvia, chief economist at the Wachovia banking group. "We may get positive economic growth driven largely by federal spending, but people on the street will say, Where are the jobs?'"

June's payroll reductions were deeper than the 363,000 that Wall Street economists expected and average weekly earnings dropped to the lowest level in nearly a year.

However, the rise in the unemployment rate from 9.4% in May was not as sharp as the 9.6% predicted by many analysts. Still, many economists predict the jobless rate will hit 10% this year, and keep rising into 2010, before falling back.

All told, 14.7 million Ameri-cans were unemployed in June.

If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 16.5% in June, the highest on records dating to 1994.

Since the recession began in December 2007, the US economy has lost a net total of 6.5 million jobs.

On Wall Street, the employment news pulled stocks lower. The Dow Jones industrials lost about 170 points in early trading, and broader indices also fell. The Dow later closed 223.32 points down at 8280.74.

In London, the Stock Exchange's benchmark FTSE-100 index ended ended down 2.5%, or 106.44 points, at 4234.27 after closing 2.2% higher on Wednesday, the first day of the new quarter.

Germany's DAX fell 186.95 points, or 3.8%, to 4718.49. while the CAC-40 in France was 100.59 points, or 3.1%, lower at 3116.41.