Job losses accelerated more quickly than expected last month and the unemployment rate rose to 9.5%, casting doubt on prospects for the U.S. economy to soon rebound.

U.S. employment fell by a seasonally adjusted 467,000 jobs in June, after declining by 322,000 the month before, the Labor Department said Thursday. The report is at odds with such signs of recent economic improvement as growing home sales and increased business investment.

"I think we're past the period of free fall in the economy but it would be premature to say that we've reached the bottom, or might, within the next couple of months," said Jeffrey Frankel, an economics professor at Harvard University. "I'm expecting the recovery to be a slow one."

The quickening pace of job losses fed a growing concern within financial markets that a recovery may be further off than previously thought. Investors fled stocks and commodities Thursday for the relative safety of U.S. Treasurys and the dollar.

The unemployment data helped set a negative tone on the eve of earnings season. Analysts began cautioning that stocks may still be priced too high relative to earnings, despite the 5.9% pullback of the past three weeks. The Dow Jones Industrial Average dropped 223.32 points Thursday, or 2.6%, to 8280.74, the biggest decline ahead of a July 4 holiday in more than 50 years. Oil slumped 3.7%.