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.