WASHINGTON (Reuters) - U.S. employers cut workers for a sixth straight month in June for the longest such streak since 2002 and the country's vast service sector unexpectedly contracted, underscoring the economy's frailty.

The Labor Department said on Thursday that 62,000 nonfarm jobs were shed last month, bringing the number of jobs lost this year to 438,000 as a housing market crash chilled growth.

The unemployment rate, which shot up sharply in May, held steady at 5.5 percent.

A separate report showed new applications for jobless benefits hurdling to 404,000 last week, a level associated with past recessions and that suggests the labor market continued to weaken.