The U.S. economy shed an estimated 524,000 non-farm jobs in December, capping a year that brought more job losses than any since 1945, the year World War II ended.

The job losses -- 2.6 million in 2008 with most of those in the final quarter -- brought the national unemployment rate to 7.2 percent, up from 6.8 percent and the highest rate in 16 years, according to data released yesterday by the U.S. Labor Department.

November and December marked the first time in the 70-year history of the jobs report that the American economy lost more than half a million jobs in two consecutive months.

The losses were a bit worse than economists were forecasting, leading to a fresh round of concern that the ongoing recession could be a prolonged one, dragging through 2009 and beyond, and possibly pushing the jobless rate to one in 10.

Gross domestic product and personal consumption also are expected to contract throughout 2009, many economists say.

President-elect Barack Obama said the jobs report reinforced the urgency with which Congress must consider his massive stimulus plan.

"Clearly the situation is dire," he said during a news conference to discuss his national security team. "It is deteriorating and it demands urgent and immediate action."

Congressional Democrats followed their leader yesterday, including U.S. Rep. Jason Altmire, D-McCandless.

The unemployment numbers "provide further evidence that Congress has no time to lose in putting in place a robust economic recovery and reinvestment plan," he said in a statement, adding that the plan should include accountability standards to ensure the money is being used effectively.

Few sectors have escaped the mauling -- only the education and healthcare sectors, and the government employee ranks, grew in 2008 -- but the heaviest bleeding is in the manufacturing sector.

Of the half-million-plus jobs lost in December, 149,000 came from manufacturing. In 2008, the sector lost 791,000 jobs -- 31 percent of the 2.6 million American jobs lost on the year and 5.74 percent of the manufacturing workforce, according to the U.S. Business and Industry Council, a trade group.

"The continued hemorrhaging of manufacturing jobs is particularly distressing given that the nation is going to have to produce its way out of the current recession," said Kevin L. Kearns, president of the council. "We cannot spend, export, print or borrow our way out of this looming economic disaster -- contrary to much Washington and Wall Street conventional wisdom."

Manufacturers used yesterday's report to push new regulations that would boost domestic production -- a Congressional mandate, for example, requiring the purchase of American-made textiles, machinery and concrete for all state and federal transportation and transit projects receiving taxpayer funding. (A similar mandate already exists requiring government transit projects to use American steel and iron.)

Conservative policy groups, meanwhile, said the dreadful November and December numbers demonstrate the American business community's aversion to the impending Obama presidency and the extra debt that will be accumulated by the president-elect's stimulus plan.

"I think there's a real chance it's going to do more harm and good," said Pat Toomey, president of The Club For Growth, during a TV appearance. "We can't spend our way out of a recession. If that was all it took, we wouldn't be in one now."

Liberal groups, such as the Economic Policy Institute, say the report underscores the need for swift government intervention. "We're in huge trouble," said EPI economist Heidi Shierholz. Particularly troubling, she said, is not the unemployment number, but the under-employment number -- people who want full-time work, but are forced to work part-time hours.

That number increased by 715,000 over November. The combined unemployment and under-employment data suggest a poor jobs outlook, even if the GDP recovers in 2010, she said.

"The labor market is going to be floundering for another two years," Ms. Shierholz said. "The labor market lags the overall economy."

President Bush, set to leave office in two weeks, inherited a December 2000 economy that had 132.5 million non-farm payroll jobs. As of last month, there were 135.5 million such jobs, an increase of 3 million over the duration of his presidency. On his watch, employment peaked in December 2007, with 138.1 million non-farm jobs.