US job losses highest since World War II

Over half a million jobs were lost in the US in December, taking the jobless rate to 7.2%, up from 6.8% in November - the highest since January 1993.

The figures have sparked concern that the world’s largest economy will be in recession for a long time to come.

Figures from the US labour department said job losses for the 2008 year hit 2.6 million - the largest annual loss since 1945 when 2.75 million jobs were axed.

The majority of 2008’s job losses were in the last four months when nearly 2 million people lost their jobs, said the figures.

Telecoms giant AT&T attributed to some of the job losses last month by shedding 12,000 jobs.

The figures also revealed that the number of people who worked part time (as a result of hours being cut or unable to secure full-time work) rose by 3.4 million to 8 million in the last year.

According to President-elect Barack Obama, drastic action is needed to help the economy, adding that the situation is ‘dire’.

Mr Obama said good progress was being made with regard to the $800 billion (£526 billion) stimulus package, which will comprise tax breaks, including rebates for people with an income of below $200,000 a year, as well as tax credits for companies taking on extra staff.

Mr Obama’s package is also set to create 3 million jobs by 2011.

The news from the US labour department was not well received as the dollar fell to €1.37 against the euro and the Dow Jones lost 124.8 points at 8617.66 points.

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