Obama plan 'could create 4m jobs'

Mr Obama says the US could lose its competitive edge if action is not taken

US President-elect Barack Obama says urgent action is needed on the economy, and his $775bn (£509bn) stimulus plan could create up to four million jobs.

Mr Obama, who takes office in two weeks, wants to cut taxes and create jobs through increased government spending on public works projects.

"It's not too late to change course, but only if we take immediate and drastic action," he said.

The US unemployment rate is 7.2%, after 524,000 jobs were lost in December.

Recession fears

The number of job losses last year was 2.6 million, the largest since World War II.

The figures, released on Friday, heightened fears that the US is entering a long period of recession.

The president-elect published a detailed analysis of his recovery plan by his economic advisers, who said it could create up to four million jobs by the end of 2010.

The analysts estimated that the unemployment rate at the end of 2010 would be 1.8 percentage points lower if the plan was enacted.

"If nothing is done, economists from across the spectrum tell us that this recession could linger for years and the unemployment rate could reach double digits.

"They warn that our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world," he said in his weekly YouTube address.

Margins of error

The report estimates how many jobs each part of the plan would create.

More than 40% of the new jobs should go to women and 90% of them should be in the private sector.

It concedes that the estimates are "subject to significant margins of error". This is because the assumptions on which it is based may prove wrong and the package may change as it goes through Congress.

Senior Democratic senators have expressed scepticism that tax cuts will lead to growth and job creation.

They want more money spent on infrastructure and energy projects.