Friday sees the release of the US Labor Department's monthly jobs data which is likely to show that the number of jobs lost in in the US during 2008 was the highest since 1945.

According to the median estimate of economists surveyed by Bloomberg an additional 500,000 jobs were lost in December, resulting in a cumulative reduction in headcount of 2.4 million in the year.

Despite Barack Obama's grand plan for an extensive fiscal stimulus, the US economy will continue to slash jobs throughout at least the first half of 2009 and for possibly longer.

The unemployment rate, which stood at 6.7% in November, is likely to have climbed to 7% in December, the highest level since 1993. It would not be surprising to see this figure edge towards double digit figures especially if the fiscal stimulus and cuts to interest rates don't have the desired effect.

Consumer confidence in the US fell to a record low in the US in December signalling that the economy has a long way to go before the economy starts to improve. Historically an upswing in consumer confidence has lead general economic revival by about twelve months.

Even though retailers are slashing prices and oil prices have fallen by over 70% from their peak, consumers are becoming increasingly worried about the outlook for their jobs and incomes.

According to the Conference Board, respondents saying jobs were "hard to get" was 42% in December - up by five percentage points from November, whilst those claiming jobs were "plentiful" dropped to 6.2% from 8.7%.

The level of consumers expecting increased incomes fell to 12.7% in December down from 13.1% in November.

Economic realities have started to bite, forcing consumers to accept the realities that although prices are falling, without a job or with falling incomes lower prices will make little difference.

An upswing in the US economy will lead the upswing in the world economy, it seems like this is still some way off.