THE US economy lost more than half a million jobs in December for the second consecutive month, new figures showed yesterday, making 2008 the worst year for job losses since 1945.

The unemployment rate - which hit a low of 4.4 per cent before the start of the credit crisis - jumped to 7.2 per cent, its highest level in 16 years. Unemployment has risen by a full percentage point since September, when the crisis intensified with the collapse of Lehman Brothers. Overall, the economy lost 2.6 million jobs in 2008, the biggest number since the end of the second World War in 1945, with nearly two million of those losses coming in the last four months.

President-elect Barack Obama seized on the jobs report, saying it showed the jobs situation was "dire" and "deteriorating", and urged Congress to quickly pass his proposed near-$800 billion fiscal stimulus package. "This morning we received a stark reminder of how urgently action is needed," he said. - (Financial Times service)