SYDNEY (Reuters) - Australian business conditions worsened in June with the outlook for employment taking a notable hit, a survey showed on Tuesday, though firms were a little more confident as cost pressures eased.

The survey from the National Australia Bank ( NAUBF ) showed its index of business conditions fell 2 points to +4, falling below its long-run average. In contrast, the index of business confidence bounced 6 points to +4 with gains reported in manufacturing and wholesale.

Within the conditions measure, the index of employment dropped 6 points to stand at 0, while sales were broadly flat.

"While its only one month's read, the employment index is now below its long-run average and may be signalling that the broader slowing in the economy is flowing through more strongly to labour demand," said Gareth Spence, head of Australian economics at NAB.

The survey found a welcome cooling in price pressures, with labour costs and purchase costs slowing. Inflation in product prices eased to a quarterly rate of just 0.7%, while retail prices held at 1.5%.

"Price pressures continue to ease in a trend sense though the data certainly remains bumpy," said Spence.

The Reserve Bank of Australia (RBA) left interest rates unchanged at 4.35% for a fifth straight meeting last month but warned it was vigilant to upside inflation risks that could require further tightening.