NEW YORK—Commodity prices fell sharply Thursday as a worse-than-expected jobs report sent investors in search of less risky assets.

The Labor Department rattled the market when it said employers slashed 467,000 jobs in June, far more than the 363,000 economists had expected. The unemployment rate jumped to a 26-year high of 9.5 percent.

The report, one of the most closely watched gauges of the economy’s health, was unsettling for investors who have grown increasingly fearful that any recovery won’t be as quick or as strong as many have been hoping for.

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