Fears that unemployment in America is set to rise sharply were raised yesterday after jobs data revealed that there are now more people out of work across the United States than at the beginning of the last recession in 2001.

While the number of Americans filing for unemployment benefits for the first time fell last week, over an eight-week period, the average number of people losing their jobs hit a high of 374,000. At the beginning of the last recession, in March 2001, the number of newly unemployed Americans hit 362,000 a week, and then rose quickly before reaching its peak of about 490,000.

Ian Shepherdson, chief US economist at High Frequency Economics, said: “The key point here is that the pace of layoffs is now quite high, with no prospect of any reversal or even a levelling-off in the near future.”

About 5.5 per cent of the American workforce is unemployed. That number is expected to rise to about 6 per cent by the end of the year, a rate that would represent about 9.3 million Americans out of work.

Unemployment figures are watched closely by economists as a key measure of the health of an economy.

Kevin Logan, senior economist at Dresdner Kleinwort, said: “Recessions are all about unemployment. If you look at the last recessions in 2001 and 1990, you see that once the US moved into a recession, unemployment started to rise by about 20 per cent over a two-month period. This time round, the peak is yet to come. In a recession, unemployment rises rapidly and can spike up very quickly indeed.”

Mr Logan explained that during the 1990 slowdown, about 8 per cent of the US workforce lost their jobs. It often takes many months before Wall Street knows for sure whether an economy has fallen into a recession because of the time lag between the actual slowdown and the publication of statistics to prove it.

The jobs data will apply more pressure on the US Federal Reserve to keep interest rates on hold at 2 per cent when it meets next week.

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