The US unemployment rate has risen to its highest level in more than four years, official figures show.

American companies cut workers for a seventh straight month, but the losses were much lower than most economists had predicted.

According to the US Labor Department, the economy lost around 51,000 non-farm jobs in July.

That left the unemployment rate at 5.7 per cent, up from the 5.3 per cent recorded in June.

Analysts had been expecting 75,000 jobs to go last month.

Firms have been reluctant to take on new staff amid soaring oil, gas and food prices, and slowing economic growth.

The hard-hit manufacturing sector lost 35,000 jobs last month, while the construction sector shed nearly 22,000 jobs.

The only major sectors showing job creation in July were education, health services, government and hospitality, the Labor Department said.

These figures will only add to fears that the world's biggest economy is heading towards a recession.