United States president-elect Barack Obama has announced plans to save or create 2.5 million new jobs as he forges ahead in his bid to shore up the flagging economy ahead of his January inauguration.
Mr Obama said he was crafting an aggressive two-year stimulus plan to revive the troubled economy, warning that swift action was needed to prevent a deep slump and a spiral of falling prices.
"If we don't act swiftly and boldly, most experts now believe that we could lose millions of jobs next year," the Democratic president-elect said.
Mr Obama, who succeeds President George Bush on 20 January, said the economy could get worse before it gets better.
"We now risk falling into a deflationary spiral that could increase our massive debt even further," he said.
The president-elect said the plan would aim to save or create 2.5 million jobs by January 2011 and would be "big enough to meet the challenges we face." Any additional jobs would offset by what is expected to be a dismal employment picture in the near future.
He called in October for a $US175 billion stimulus measure, but his radio speech suggested he was ready to push for a much larger package. He did not give a price-tag in the speech.
The number of Americans joining the unemployment rolls surged to the highest in 16 years, up more than 540,000, the Labor Department said on Thursday. Government data also painted an increasingly dire picture of the housing market.
"The news this week has only reinforced the fact that we are facing an economic crisis of historic proportions," Obama said.
Democratic sources said Obama had chosen New York Federal Reserve president Timothy Geithner to take the helm at Treasury and help pull the United States out of an economic nosedive.
U.S. stocks, which had been sinking all week, surged more than 6% on reports that Geithner, 47, had been selected. U.S. Treasuries fell and the dollar surged.