NEW YORK | All those job cuts at automakers, newspapers and even Starbucks are hard to stomach. But in a roundabout way, they may actually help the economy a bit.

No, that isn't a misprint.

The story here solely has to do with how soaring layoffs impact wage growth -- a scary inflationary factor that economists hate to see, especially in a financial climate already plagued by surging prices for food and fuel.

When the public perceives jobs as being scarce, workers may be less inclined to demand higher wages. And since labor is the top cost for many businesses, holding salaries down might mean that cost won't be passed on to consumers.

That may be hard to grasp amid the sea of headlines showing more bad news on the job front. The latest blow came Thursday: Employers cut payrolls by 62,000 in June, the sixth straight month of nationwide job losses, according to the Labor Department. The unemployment rate stayed at 5.5 percent for the second straight month, the highest level it has been in more than three years.

That followed Starbucks' announcement earlier in the week that up to 12,000 workers, or 7 percent of its global workforce, could be out of jobs as the coffee chain closes 600 of its stores.

Over the last month, at least half a dozen newspapers have said they plan to slash payrolls. Airlines, as they decrease their flying routes and contend with higher fuel costs, will lower their staffing levels, too. Then there is the troubled auto industry, which has seen sales of SUVs slump as gas prices surge to over $4 a gallon. With factories being shut and production shifted, thousands of workers will lose their jobs.

All those layoffs will take a considerable toll on the economy. The lost wages from fired workers will likely mean a pullback in consumer spending once the government's rebate checks run out, which could then cause the economy to contract in the second half of this year. The economy grew at a 1 percent annualized rate in the first quarter.

"This is the death blow for the economic expansion," said Chris Rupkey, chief financial economist at Bank of Toyko-Mitsubishi UFJ Ltd. "The economy has never been able to recover from this amount of lost jobs since the 1970s and still remain on its feet."

But as anyone who buys gas or food knows, another big worry for the economy is inflation. Oil prices have surged to more than $145 a barrel, more than double year-ago levels. Everything from milk to bread is costing consumers lots more than it did months ago.

The Federal Reserve has homed in on inflation because its policy-makers know that surging prices can become unstoppable, eating into paychecks, knocking down corporate profits and eroding the value of investments.

With pricing pressures clearly rising, the central bank decided at its most recent meeting in late June to leave its key interest rate steady at 2 percent. That ended the central bank's most aggressive rate-cutting in two decades to shore up an economy battered by the housing, credit and financial crises.

"Upside risks to inflation and inflation expectations have increased," the Fed said in its statement after its meeting on June 25.