A huge downshift.......

Employment is the #1 barometer to measure growth of any economy.

US companies slashed payrolls last month at the fastest pace in 34 years as the economy headed for its deepest and longest recession since World War II. Employers cut 533,000 jobs, bringing losses so far this year to 1.91 million, the Labor Department said on Friday in Washington.

• It’s unbelievable numbers, it seems US is on thier way to the worst recession of the postwar period.
• The plunge may spur incoming President Barack Obama to come up with an even bigger fiscal stimulus package than economists’ projections of about $700 billion.
• Friday’s figures also will add to pressure on the Federal Reserve to take radical steps to revive credit markets and on lawmakers to bail out the auto companies.
• This is a huge downshift, much larger than anyone thought. The upper bound on a stimulus package is going up, not down. As the hole gets larger, the amount you need to fill it gets larger.
• Payrolls are likely to keep sliding into next year as the collapse in credit and slump in spending hurt companies from General Motors Corp to Citigroup Inc and AT&T Inc, it will eliminate 8 per cent of its workforce.
• Obama said in a statement the job loss demonstrates the “urgent” need for a recovery plan and offers an “opportunity to transform our economy” through investments in infrastructure and alternative energy technology.
• Fed Chairman Ben S Bernanke this week outlined unorthodox policy action that officials can take beyond lowering interest rates. One option would be to purchase longer-term Treasuries on the open market to inject more cash into the financial system.
• US automakers have been particularly hard hit as sales last month dropped to the lowest level in 26 years. The top executives of General Motors, Ford Motor Co and Chrysler LLC this week appealed to Congress for as much as $34 billion in government assistance.