WASHINGTON - US employers hired at a dismal pace in June, raising pressure on the Federal Reserve to do more to boost the economy and further imperilling President Barack Obama's chances of re-election in November.

The Labour Department said on Friday non-farm payrolls expanded by just 80000 jobs in June, falling short of forecasts though a tad higher than a revised May reading of 77000.

Job creation during the month was not enough to bring down the country's lofty 8,2% unemployment rate. The report appeared sure to fuel concerns that Europe's debt crisis is shifting the US economy into low gear.

"There's just not a lot of momentum in the economy," said Sam Bullard, an economist at Wells Fargo in Charlotte, North Carolina.

Mitt Romney, Mr Obama's Republican challenger, is focusing his campaign on the weak jobs market that has dogged Mr Obama's presidency.

After the jobs data were released, US stock futures tumbled, government bond prices climbed and the euro fell to a five-week low.

The euro slid to $1,2362, down from the $1,2377 it traded at before the report, marking a drop of 0,3% from the prior close.

US stock index futures extended their decline while Treasuries prices rose and benchmark 10-year note yields fell to their lowest levels in four days at 1,57%.

In South Africa, the rand extended its losses against the dollar, falling as much as 1,7% as the weaker-than-expected US jobs numbers hit global risk sentiment.

The rand hit a session low of R8,285 to the greenback, its softest level in a week, and was down 1,53% at R8,27 by 2.54pm local time compared with Thursday's close.

UNSETTLING DETAILS

The details of the report were also unsettling. The government said the economy created 1000 fewer jobs during April and May than previously estimated.

The somber report might push the Federal Reserve closer to taking new actions to lower borrowing costs to encourage companies to increase hiring. Analysts polled by Reuters expected an increase in payrolls of 90000 jobs.

Debt woes have bogged down much of Europe, sending some countries into recession. The eurozone crisis in turn has dulled economic growth around the world, from China to Brazil. A survey on Monday found US manufacturing contracted for the first time in nearly three years in June.

Europe is not the only worry weighing on the US outlook.

Washington plans enough belt-tightening at the start of 2013 to easily send the economy into recession. Cautious observers wonder if lawmakers can avoid this "fiscal cliff".

"Firms are saying, 'Is there really a reason to ramp up hiring right now?'" said Mr Bullard.

Job creation averaged 75000 per month during the second quarter, compared with an average increase of 226000 in the first quarter. Part of the slowdown could be because mild weather led companies to boost hiring in the winter at spring's expense.

But recent weakness in everything from retail sales to business sentiment suggests something more fundamental is at play.

"We're not expecting things to take off in the second half of the year," said Sara Klein, an economist at Moody's Analytics in West Chester, Pennsylvania. "Weather wasn't the only factor."

STORM BREWING

Until recently, the US had been a relative bright spot in the global economy, especially in manufacturing. Most economists still expect lacklustre growth over the rest of 2012 rather than a slip toward recession.

But economic weakness abroad has lately become a formidable hurdle, as Mr Obama has acknowledged, and global policymakers are acting like a storm is brewing.

China, the European Central Bank and the Bank of England all eased monetary policy on Thursday, raising speculation they had co-ordinated their action.

The Fed eased policy further last month, but the recent run of weak data has fuelled speculation the US central bank could deliver more stimulus when its next meeting concludes on August 1.

Even though June's pace of hiring was decidedly weak, the Fed might not want to unveil bold new measures now because the real storm could be months down the road.

"Hiring isn't as strong as earlier this year ... but not to the point where you see obvious need for Fed action," said Cooper Howes, an economist at Barclays in New York.

REUTERS