The U.S. economy suffered its worst monthly job losses since 1974, data showed today, as President-Elect Barack Obama warned the situation was going to get worse before it gets better.
The new data underscores the depth of the global financial crisis which this week prompted a slew of interest rate cuts worldwide.
Payrolls were cut by 533,000 - much worse than the forecast for a reduction of 340,000 jobs.
Market reaction was immediate, with shares, oil and the dollar falling, and U.S. Treasury prices leaping.
Today oil fell to below $45 a barrel, with expert predicting it could plummet as low as $25 if the global recession reaches China.
"These are horrendous numbers... This is an economy that is in absolute free-fall right now. Confidence has collapsed," said Nigel Gault, chief U.S. economist at Global Insight.
Mr Obama called for a stimulus plan to create jobs over the next two years.
"There are no quick or easy fixes to this crisis, which has been many years in the making, and it's likely to get worse before it gets better," he said.
Obama has called for a massive government stimulus package that would preserve or create 2.5 million jobs and rebuild crumbling infrastructure in an effort to contain the damage from the recession.
"This painful crisis also provides us with an opportunity to transform our economy, to improve the lives of ordinary people by rebuilding roads and modernizing schools for our children, investing in clean energy solutions to break our dependence on imported oil, and making an early downpayment on the long-term reforms that will grow and strengthen our economy for all Americans for years to come," he said.
Neighbouring Canada registered more job losses in November than any other month since June 1982.
Global sales at BMW, the world's top premium carmaker, plunged by a quarter in November, and Honda backed out of Formula One motor racing, vividly demonstrating the problems facing the auto industry.
With many developed countries either in recession or heading that way, central banks have cut interest rates close to the bone and attention is now starting to focus on what happens if they get to zero.
U.S. interest rate futures leapt after the jobs data, moving to price in a half-point rate cut when the Federal Reserve meets later this month, which would take the fed funds rate to just 0.5 per cent.
Against the bleak economic backdrop, signs of tension marked two days of economic talks between the United States and China.
The Americans fretted that China might be losing the stomach to let its currency keep rising in value and Beijing voiced concern about Washington's management of the world's largest economy - in which China has a huge financial stake.
US. Treasury Secretary Henry Paulson described the talks as "robust" and characterised by "straightforward back-and-forth" exchanges.
Assistant Chinese Finance Minister Zhu Guangyao, asked whether Beijing would keep buying U.S. debt, responded by urging Washington act to protect China's financial interests.
"We hope the U.S. side will seriously consider the Chinese side's concern and protect the interests of Chinese investors," Zhu told a news conference.
Among the few concrete results at the end of the meeting, the governments agreed to make an extra $20 billion of credit available to finance U.S. and Chinese exports to developing countries that are struggling to get access to trade credit.
Investors have been especially sensitive about the fate of the U.S. automobile industry, the failure of which would hit a chain of parts suppliers and financiers that spans the world.
General Motors Corp and Chrysler LLC told sceptical lawmakers they were open to restarting merger talks to secure aid and prevent job losses.
Paulson said the failure of any major U.S. car maker "would be a bad thing".
Interest rate cuts, higher government spending and tax cuts have been introduced to try to restart stalling economies.
Germany's upper house of parliament on Friday approved a package of measures designed to boost Europe's biggest economy as data showed manufacturing orders plunged in October after a record decline the previous month, pointing to a deepening recession in Europe's biggest economy.
The government says the package is worth 31 billion euros ($39.6 billion) over two years, but critics say it is not radical enough.
Sweden unveiled $1 billion worth of stimulus measures to help the job market and the construction sector and also faced criticism in financial markets for taking too cautious an approach given the scale of its troubles.
The International Monetary Fund (IMF) has also bailed out several developing countries.
Turkey is expected to seek a loan agreement with the IMF amounting to $25 billion, government sources told Reuters.
Policymakers have stressed official rate cuts are not having the impact they should because banks are not passing them on or lending freely - begging the question, what to do next?
The Bank of England is considering buying up government debt and flooding markets with cheap cash, an unsourced report from The Daily Telegraph newspaper said.
A chorus of Federal Reserve watchers expect it to lower its key fed funds rate to zero by January and to expand quantitative measures to pump more liquidity into markets, echoing efforts by Japan to revive its economy in the 1990s.
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