Remember last month’s upside surprise from the non farm payrolls data? That is now history as today’s data from the month of June showed a much larger than expected loss of 467,000 jobs in the month. Analysts were looking for a loss of 325,000 jobs this month, and May’s number was a loss of just 322,000 jobs. Clearly this puts a major damper on the economic recovery prospects, and it will have to make investors think twice before believing in a market rally at this point.

Many strategists are now leaning more toward a W shaped economic recovery, meaning that the economy would start to turn upward as it did in the last couple months, then resume a sharp slide to the downside before finally recovering again. Many on Wall Street believe that another couple of jobs numbers like today’s will confirm that we are indeed in the second slide of this economic downturn.

There were no signs of strength inside the payroll data today, but the service industry was notably weak as was the consutruction industry. The only sector that moved to the upside was the healthcare industry, and even it is weakening from previous months.

Immediately stock markets around the world reacted in a very negative way to this June non farm payroll data in the United States, and for good reason. Those who were talking about all of the economic “green shoots” and the prospects of a recovery in the second half of the year were severely muted by such a weak number. Certainly the hope is that if this is indeed a second leg down that it is short lived and not as severe as the first leg. The bottom line is, there will be no permanent economic recovery without an improvement in the employment situation.

The Department of Labor reported this morning that 663,000 Americans lost their job in the month of March. The unemployment rate jumped to 8.5%, the highest it has been in over 25 years. Those hoping for some good news from the Labor Department had to be disappointed in the report, which offered more of the same, bad news on the labor front.

Manufacturing and construction job losses were once again the worst of all, but there were really no bright spots outside of tiny ones in health care and education. Even the health care and education sectors are barely growing now, and a few months ago they were growing quite nicely. It simply is a broad based decline in the job market that is leaving no sector untouched.

One of the things that many analysts have been watching closely is the number of hours worked per week. Once again this month the average work week fell to 33.2 hours, which is the lowest figure the Bureau of Labor Statistics has ever measured since it began keeping track in 1964. Why is that such an important number? It is important because it shows that the overall trend is still more towards cutting employee hours back to part-time from full-time, and not vice-versa like you would hope to see.

If there is any bit of positive data from this report it is that job losses don’t appear to be falling off a cliff anymore. The number of jobs lost has now been quite steady for the past couple months, which could hopefully show that we are finding a bottom for the labor market, but only time will tell.

The truth of the matter is, there aren’t many positive ways to spin today’s number, but that was pretty much the expectations. Sooner or later the labor market will need to begin turning around if the American economy is going to come back in any meaningful way.