WASHINGTON: President-elect Barack Obama issued a sober warning on Friday that the worst was yet to come for the US economy after dismal job loss
US economy

While government data showed the United States lost more than half a million jobs in November, the biggest monthly loss in 34 years, President George W Bush was not quite as gloomy, saying he saw some encouraging signs.

But Obama, who won the November 4 election against Republican rival John McCain in part because of the worsening economic picture, was less enthusiastic, noting that the economy had already lost 2 million jobs during the year-old recession.

"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 in a statement. "But now is the time to respond with urgent resolve to put people back to work and get our economy moving again," he said.

Bush, who has resisted calls for a second major package to jolt the economy back to life, said he was concerned about the job losses and the government was trying to fix the root causes of the economic downturn. "We're working to stabilize the markets and make credit more affordable and available," said Bush, whose eight-year term at the White House ends on January 20.

"Credit is beginning to move. A market that was frozen is thawing. There's still more work to do, but there are some encouraging signs." The US House of Representatives passed a $61 billion stimulus in September but opposition from Senate Republicans backed by a Bush administration veto threat killed the bill.

Obama repeated his call for an economic recovery plan that will save or create at least 2.5 million more jobs over two years and improve credit flows. Economists and analysts say the Obama stimulus plan could cost at least $500 billion.

"The rapidly worsening job situation significantly increases the probability of President-elect Obama proposing a $500-700 billion fiscal stimulus package," said Mohamed El-Erian, chief executive of the bond giant Pacific Investment Management Co Sen. Charles Schumer, a New York Democrat who chairs the congressional Joint Economic Committee, said the job number blowout should be all the evidence Washington needs to "act swiftly and decisively" to shore up the economy.

The country's economic problems were on full view this week when humbled US automakers who came to Washington for a second time to beg for $34 billion emergency taxpayer bailout to help keep their industry alive. Another senior US lawmaker, Democratic Rep Barney Frank, warned of an "unmitigated disaster" if a major carmaker were to collapse as the economy is already hemorrhaging jobs.

Bush said he was concerned about using taxpayer money to help companies that might not survive. But he nevertheless urged Congress to act next week on the bailout plan, a call which, even from a lame duck president, may sway some skeptical lawmakers. "And it's important to make sure that taxpayers' money be paid back if any is given to the companies," he said.

Obama has supported giving Detroit as much as $50 billion in federal aid to help automakers weather the credit crunch and retool to manufacture more fuel-efficient cars. Earlier this week, Obama said any help to the automakers should be "based on realistic assessments of what the auto market is going to be and a realistic plan for how we're going to make these companies viable over the long term."