As the global financial firestorm begins — if we are lucky — to subside, so the fallout for the economy from the credit crisis is only just starting to be felt. The steep increases in numbers out of work revealed yesterday are only the initial signs of the eventual toll this crisis will inflict on what the experts call “the real economy” — and which, to the rest of us, reflects our real lives.

This real economic cost, and the cost in human misery as hundreds of thousands, and perhaps a million-plus, lose their jobs, looks likely to be very high indeed.

The 145,000 overall rise in unemployment over the past eight months already exceeds the 135,000 rise suffered in the economy's most recent bout of weakness, in 2005 and 2006. Yet far worse is likely to follow.

The monthly rise in the jobless count soared to 35,000 in August, and was barely less, at 31,000, last month. These increases are similar to those in the early stages of the last recession, in 1991.

Then, the monthly rise in unemployment accelerated rapidly to show losses first of about 40,000, then 70,000 or 80,000, before peaking at 120,000 and then slowly tailing off. The jobless total rose for 31 successive months.

A similar acceleration in job losses was suffered in the 1980s, although the toll dragged on for longer — lasting for 44 months before there was any let-up.

We are already seeing the biggest unemployment rises for 16 years. There is little reason not to expect things to get much worse.

One critical difference from earlier recessions, however, may be in who falls victim. In the Eighties, the brunt fell on manufacturing which was laid waste, shedding almost two million workers.

In the early Nineties, amid a housing slump, manufacturing shared most of the pain with construction, although several hundred thousand jobs went from service industries such as retailing, restaurants and finance.

This time, manufacturing is suffering again, as is construction. Yet those losses seem likely to be eclipsed soon by drastic job cuts in the retailing and leisure sectors, as a consumer crunch hits home, and in the financial industries. We may be entering the first recession in which the biggest cost in jobs will be in services, not manufacturing.

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