ON both sides of the Atlantic 1974 was a grim year. In Britain the IRA bombing campaign hit new heights of savagery with attacks against pubs in Guildford and Birmingham. As the year ended, the home of former prime minister Edward Heath was bombed.

In the US it was the year President Richard Nixon resigned in disgrace. In December, with the American economy deep in recession, job losses hit a record monthly high of 602,000. Last week the US government announced mounting job losses had now hit the biggest monthly tally since those dark days.

The nation’s employers cut 533,000 jobs in November, the Bureau of Labor Statistics reported on Friday. US employers have so far shed 1.9m jobs in 2008 and the pace appears to be accelerating — some 1.3m of those losses have come in the past three months.

The unemployment rate, calculated from a separate survey, rose to 6.7% from 6.5%, reaching its highest level since 1993.

“Today’s job data reflects the fact that our economy is in a recession. This is in large part because of severe problems in our housing, credit and financial markets,” President George W Bush said last week. It was the first time Bush had publicly acknowledged the country had slipped into recession.

When the lay-offs started, the recession’s origins in the collapse of the housing market and the credit crisis meant financial services and construction were the hardest-hit sectors, but many others remained buoyant. Now the cuts have spread across the economy.

Construction continued to cut jobs last month, with 82,000 going in November. Manufacturing shed 85,000 and a stunning 370,000 service-sector jobs were axed. That figure included 91,000 in retail, a sector normally booming as the holiday season approaches.

This Christmas US retailers are also cutting back on staff, adding only 217,200 seasonal workers last month, the weakest November figure since 1988, according to executive placement consultancy Challenger, Gray & Christmas. The figure was 53% lower than a year ago, when retailers added nearly 458,000 holiday workers.

Beneath the headline figures there was more bad news. The number of people too discouraged even to look for work rose to 608,000, more than double that of a year ago. The number of people working part-time because they cannot find full-time work climbed to 7.3m, up 2.8m in a year. As employers cut hours as well as jobs last month, the average working week dipped to 33.5 hours, a record low. The jobless rate for black workers is now 11.2%.

“We could have reached 7% unemployment, but for a mass exodus from the labour force; people gave up looking because they don’t think there are any jobs. Is there any silver lining in today’s report? In a word: No,” said Bill Cheney, chief economist at John Hancock Financial.

The picture was little better this side of the Atlantic where Britain’s jobless crisis is growing by the day. Last week more than 11,000 jobs were axed. Overall, unemployment numbers are nearing the 2m mark, the highest level for almost 11 years. Experts have warned that the figure could reach as high as 3.3m by 2010.

A bloodbath is expected in the government-rescued financial-services sector, where some analysts are predicting job losses of up to 100,000. But the economic downturn is permeating all sectors of the UK economy, with car manufacturing, related suppliers and high-street retailers hardest hit.

A week of woe for British workers began on Monday, with a raft of companies announcing workforce cuts. Aston Martin, BBC Resources, Credit Suisse, Halfords, HSBC, and Unilever all announced redundancies and dry-cleaner William Munro axed more than 800 jobs after being placed into administration.

The losses mounted throughout the week with Glaxo Smith Kline, the UK’s largest pharmaceutical company, announcing the loss of 200 jobs.

A further 1,200 jobs went at Commerzbank in London. Nomura, the Japanese broker, said it would slash 1,000 jobs in the City following its takeover of parts of the European operations of failed Wall Street bank Lehman Brothers. Private-equity firm 3i cut 100 staff and credit-checking company Experian announced 300 redundancies in Britain and Ireland.

Even government jobs are going. HM Revenue & Customs stunned workers by announcing it would close 90 offices across the country, a move the PCS union claims will cost a total of 3,400 workers their jobs.

The carnage continued a gloomy pattern set in previous weeks when British companies axed more than 30,000 jobs.

Among the biggest losses were at BT, which is planning to cut 10,000 staff. Elsewhere, 2,400 Citigroup staff will go at its Canary Wharf headquarters; Rolls-Royce is losing 2,000 jobs over the next year; RBS is cutting 1,800 jobs; the cable group Virgin Media is axing around 2,200 of its staff; Yellow Pages directories firm Yell expects to shed 1,300 workers; and at the housebuilder Taylor Wimpey 1,000 people face unemployment.

On Wall Street the terrible jobs report was largely shrugged off by the stock markets, which had been expecting bad news. While dire, the current situation represents less than 1% of the nation’s payroll. The 602,000 jobs lost in December 1974 represented nearly 8% of the US’s then smaller economy.

President-elect Barack Obama has pledged to create 2.5m new jobs with a vast public spending programme. Given the accelerating job losses, hitting that target would barely recapture the jobs that have disappeared over the last year.

Last week Obama said in a statement that “this painful crisis” presented an opportunity “to improve the lives of ordinary people by rebuilding roads and modernising schools for our children,” and by investing in clean-energy projects.

“Weakness has spread from housing to Wall Street to Main Street,” the economics team at Swiss bank UBS wrote in a note to clients. “[The weakness] is now effectively ‘feeding on itself’, with job losses leading to weaker spending leading to more job losses, and so on. That sequence sounds quite dire and discouraging. But weakness is always self-perpetuating for a while during downturns.

“At some point, the cycle is broken: the financial markets start to respond to public policy measures and private-sector adjustments, anticipating improvement ahead; pessimism abates and markets and confidence start to recover.”

The jobs market held up even as stock markets began their rollercoaster ride earlier this year. On Friday that trend reversed and some economists seemed, cautiously, to be predicting the bottom had been reached.

“While momentum is currently downward, policy action has been stepped up dramatically, with more measures likely. In the private sector, much of the necessary adjustment in the housing industry has already occurred,” wrote UBS.

But while the end may be near, it’s not over yet warned John Challenger, chief executive officer of Challenger, Gray & Christmas.

“Those hoping for a holiday reprieve in downsizing as Christmas approaches could be disappointed. December has historically been among the larger job-cut months of the year, with many employers making last-minute staffing adjustments to meet year-end earnings goals.”

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