The U.S. economy lost more than 460,000 jobs in June, despite a $787 billion stimulus plan signed into law earlier this year and recent general discussion that this economy was beginning to turnaround.

U.S. Labor Department said Thursday employers shed 467,000 non-farm jobs last month. The loss brings the nation’s unemployment rate up 0.1 percentage point to 9.5% --the highest level in nearly 26 years.

The headline figure was considerably worse to the 350,000-estimate by economists, according to Thomson Reuters, but follows what was a relatively-better job loss figure of 322,000 in May.

"Payroll employment declines continued to be widespread among the major industries," said Keith Hall, Commissioner of the Bureau of Labor Statistics, the government agency who compiles the data. 

The unemployment rate was slightly less than the 9.6% expected by market, but brings the unemployment rate close to the psychologically-important 10% mark. It is also the highest unemployment rate since August 1983.

Average hourly earnings were flat last month at $18.53 while the average weekly hours fell by 0.1 hours to 33.0. June had the shortest work week since the Labor Department began to collect that data in 1964.

For the specific industry sectors tracked by the government, manufacturing and professional and business services took the brunt of the pain in June. Manufacturing jobs contracted by 136,000 people, while construction jobs shed 79,000 people. Retail lost 21,000 people while the business service industry shed 118,000 jobs.

Education and health services, typically considered a recession-resistant jobs category, rose by 34,000 jobs in May. Government jobs, which is both Federal, state and local, fell by 52,000 people.

"Jobs are what makes this economy tick and employers remain incredibly cautious regarding their hiring attitudes," said Stuart Hoffman, chief U.S. economist with PNC Financial. 

This now 20-month-long recession, with these massive job losses, are starting to show  its toll in various ways on the U.S. workforce. 

Discouraged workers, who are people able to work but believe there are no jobs available for them, rose by 373,000 from a year ago to 793,000 people.

The number of people considered "involuntary part-time" workers, or citizens wanting to work full time but for job or economic reasons cannot do so, remained at 9 million people. That figure is up 4.4 million from the start of the recession.

Total unemployment, which includes involuntary part-time and discouraged workers among others, rose to 16.5% - showing that this recession has impacted about one of six workers in the U.S. 

"It's perfectly clear at this point that labor market weakness is persisting," said Dan Greenhaus, with the brokerage firm Miller Tabak.

In an interview with FOX Business, Labor Secretary Hilda Solis emphasized that the $787 billion economic stimulus package had not fully taken effect.

“This administration is not happy with these figures, but we are doing everything we can to turn this economy around,” Solis said.

Initial Jobless Claims

In a separate report, the U.S. Labor Department reported weekly jobless claims fell by 16,000 to 614,000  for the week of June 27.

Economists had expected initial claims would fall by 8,000.

Continuing claims, which are people on unemployment benefits for more than a week, fell by 53,000 to 6.702 million.

The four-week average of new claims, which aims to smooth volatility in the data, declined 2,750 to 615,250.