US companies axed 533,000 jobs in November, 183,000 more than was expected, in the worst slump in American employment since 1974.

Today's figures are the latest evidence of the country's recession, following a week in which businesses including AT&T, America's largest phone company, Viacom, the entertainment business, and DuPont, the chemicals group, laid off 33,000 workers.

Nigel Gault, chief US economist at Global Insight, described the unemployment numbers as "horrendous".

"This is an economy that is in absolute free fall right now," Mr Gault said: "Confidence has collapsed."

More than 1.5 million Americans have been made redundant in the past six months.

Following the steeper-than-expected decline and a $1.43 fall in the price of oil to $42.24 a barrel, the Dow Jones industrial average lost 224 points or 2.6 per cent, to 8,153.

America's jobless rate is now at 6.7 per cent, and employment numbers are widely expected to worsen next year after a number of banks, including Citigroup, implement plans to cut thousands of staff.

The US car industry is also expected to lay off thousands of workers, taking the unemployment rate to an estimated 8 per cent by the end of the year.

The "Big Three" — Chrysler, General Motors and Ford — yesterday asked the US Congress for $34 billion, nearly $10 billion more than originally mooted, to help bail out the ailing industry.

The Labour Department also revised its October job losses to report that 80,000 more people than previously thought had lost their positions. It originally said that there were 240,000 layoffs in October but said today that the true figure was 320,000.

The department also raised its September figures from 284,000 to 403,000.Employers were also cutting workers' hours to the shortest since records began in 1964. The length of the average working week fell to 33.5 hours.

Ian Shepherdson, chief US economist at High Frequency Economics, said: "This is almost indescribably terrible. In the past six montsh, the US has lost 1.55 million jobs, almost as many as were lost in the whole 2001 recession, which included 9/11 and the two months after. The pace of job losses is accelerating alarmingly."

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