The U.S. unemployment rate jumped to a nine-year high of 6.4% in June, the U.S. Department of Labor reported Thursday. Analysts had expected the rate to slip to 6.2%.

The report came out a day earlier than usual, and it disappointed traders with a 30,000 drop.

Not only was the June result weaker than expected, but the number was revised lower in both April and May. Employment fell 70,000 in May (initially reported as -17,000) and it reportedly dropped 22,000 in April (initially indicated flat).

Bank of Montreal says that the key source of job losses continued to be in manufacturing industries, with a drop of 56,000 in June after declines of 44,000 in May and 79,000 in April. The retail (-13,000) and trade, transportation and utility (-32,000) industries also continued to shed employees, it says. Job gains are coming in construction, the leisure and hospitality industries, and government.

“The declines in payroll employment through the second quarter, though smaller than the declines late in Q1, suggest there has been virtually no improvement in the labour market this quarter,” says BMO. It also notes that the jobless claims data, also released this morning, were disappointing too. “A jump in claims to 430,000 in the week ended June 28 reverses the drop to 409,000 in the previous week and puts the four-week average at 425,000, little changed from the 432,000 at the end of May and 423,000 at the end of the first quarter.”

BMO says that the reports add fuel to expectations that the Fed will cut rates again this summer. “Though we are not forecasting such a move, further deterioration in the labour market or other activity data might force the Fed to move,” it concludes.

BMO Nesbitt Burns is not quite as gloomy, it says, “We believe cost cutting is responsible for the lagging job sector and that, once the cost cuts are done, the stronger demand side of the U.S. economy will begin to generate some job growth to match.”

In a separate report, U.S. initial jobless claims in at 430,000 last week, a jump of 21,000 from the previous week.