WASHINGTON — A staggering 2.6 million jobs disappeared in 2008, the most since World War II, and the pain is only getting worse with 11 million Americans out of work and searching.

Unemployment hit a 16-year high of 7.2 percent in December and could be headed for 10 percent or even higher by year's end.

Yesterday's government figures are "a stark reminder," said President-elect Barack Obama, that bold and immediate government action is needed to revive a national economy that's deep in recession and still sinking.

More than a half-million jobs melted away as winter took hold in December — 524,000 in all, the government estimates — and the true carnage will almost certainly turn out to be even worse when the figures are nailed down more clearly a month from now.

"Behind the statistics that we see flashing on the screens are real lives, real suffering, real fears," said Obama, already moving full-speed with Congress to put together an emergency revival plan even though he's still a week and a half away from taking office.

The severe recession, which just entered its second year, is already the longest in a quarter-century and is likely to stretch well into this year. The fact that the country is battling a housing collapse, a lockup in lending and the worst financial crisis since the 1930s makes the downturn especially dangerous.

All those problems have forced consumers and companies alike to retrench, feeding into a vicious cycle that Washington policymakers are finding difficult to break.

Investors, too. The Dow Jones industrial average fell 143 points yesterday, to end the week down nearly 5 percent.

The Labor Department's unemployment report showed widespread damage across U.S. industries and workers — hitting blue-collar and white-collar workers, high-school dropouts and those with college degrees.

"One word comes to mind — dreadful," said Stuart Hoffman, chief economist at PNC Financial Services Group.

And, there's no relief in sight.

The new year got off to a rough start with a flurry of big corporate layoffs, and there were more yesterday. Airplane maker Boeing Co. said it plans to cut about 4,500 jobs this year, and uniform maker G&K Services Inc. is eliminating 460 jobs.

Some employers are cutting workers' hours and forcing some to go part time. The average work week in December fell to 33.3 hours, the lowest in records dating back to 1964 — and a sign of more job reductions in the months ahead, since businesses tend to cut hours before eliminating positions entirely.

"There is no indication that the job situation would stabilize anytime soon," said Sung Won Sohn, an economist at California State University's business school. "This could turn out to be one of the worst economic setbacks since the Great Depression."

'SITUATION IS DIRE'

Economists predict that a net total of 1.5 million to 2 million or more jobs will vanish in 2009, and the unemployment rate could hit 9 percent or more, underscoring the challenges ahead for Obama and for job seekers.

All told, 11.1 million people were unemployed in December. An additional 8 million were working part time — a category that includes those who would like to work full time but whose hours were cut back or who were unable to find full-time work. That was up sharply from 7.3 million in November.

If those part-time employees, discouraged workers and others are factored in, the unemployment rate would be much higher — 13.5 percent in December. That's the highest for that broader category in records going back to 1994.

Worried about the sinking economy and their own financial fortunes, companies are trimming payrolls to cut costs. Government data revisions showed losses in both October and November to be much deeper than previously reported.

"Clearly, the situation is dire, it is deteriorating, and it demands urgent action," Obama said yesterday. "For the sake of our economy and our people, this is the moment to act, and to act without delay."

Obama, who takes over Jan. 20, is promoting a huge package of tax cuts and government spending that could total nearly $800 billion over two years. With add-ons by lawmakers, the package could swell to $850 billion or higher.

The unemployment rate zoomed from 6.8 percent in November to 7.2 percent last month, the highest since January 1993.

The rate for blacks climbed to 11.9 percent, the highest since the spring of 1994. For Hispanics, it rose to 9.2 percent, the highest since May 1996. For teenagers, the 20.8 percent was the highest since September 1992.

WIDESPREAD DOWNSIZING

Last year was the first that payrolls have fallen for a full year since 2002, and the loss was the greatest since 1945, when nearly 2.8 million jobs disappeared. Though the number of payroll jobs in the U.S. has more than tripled since then, losses of this magnitude are still brutal.

The nation's jobless rate averaged 5.8 percent for the year — up sharply from 4.6 percent in 2007 and the highest since 2003.

During President Bush's nearly eight years in office, a net total of 3 million jobs were created. In President Clinton's two terms, roughly 21 million jobs were generated.

Employment last month shrank in virtually every part of the economy — construction, factories, mortgage brokers, banks, real-estate firms, accounting and bookkeeping, computer design, architecture and engineering, retailers, food services, temporary-help firms, transportation, publishing and waste management. The few fields spared included education, healthcare and government.

The lost-job total for December probably understates the reality, since some companies probably held off on layoffs around the holidays, economists said.

Moreover, the government collects the payroll information around mid-month. So the full extent of the layoffs probably wasn't captured.

Most workers with jobs saw modest wage gains. Average hourly earnings rose to $18.36 in December, a 3.7 percent increase over the year.

But workers also faced high prices for food and fuel through much of 2008.