US private employers sacked 473,000 workers in June, while mortgage applications hit a seven-month low, raising fears that America was not recovering from its recession as well as previously thought.

Private sector job losses, calculated by ADP Employer Services, were worse than the 393,000 that economists had predicted in a Reuters poll but not as bad as the 485,000 sackings in May.

Joel Prakken, chairman of Macroeconomic Advisers, whose firm worked on ADP's survey, said that he expected a further 800,000 to one million job losses this year.

The Government will release official unemployment figures tomorrow, with the jobless rate expected to hit 9.7 per cent. President Obama has warned that unemployment will hit 10 per cent in the coming months.

Also today, the Mortgage Bankers Association said that its applications index fell 18.9 per cent in the week to June 26, its lowest level since last November.

Investors, however, took comfort from the fact that job losses were down. Markets started the third quarter on a positive note, with the Dow Jones industrial average up 51.54 points, or 0.6 per cent, at 8,498.54 in the first few minutes of trading.

The Standard & Poor’s 500 index rose 4.62, or 0.5 per cent, to 923.94 and the Nasdaq composite index rose 10.46, or 0.6 per cent, to 1,845.50.

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