6.9 Americans have now lost their jobs since the downturn began in late 2007.
Unemployment in the United States has hit a 26-year high, with 9.7% of the workforce out of a job, official figures showed today - though the pace of layoffs slowed in August, raising hopes that the worst of the recession is over.

American businesses cut 216,000 staff last month, according to the closely-watched non-farm payrolls figures, released today by the labour department. That was the lowest number of job losses in a year: in January, almost three quarters of a million people were put out of work in a single month.

In total, 6.9 million Americans have now lost their jobs since the downturn began in late 2007.

In August, the heaviest toll came in the crisis-hit construction sector, where 65,000 people lost their jobs; while manufacturers laid off 63,000 staff.

The slowdown in the pace of job losses boosted hopes that the US economy is finally on the mend. President Barack Obama is under intense pressure to show that a turnaround is underway, after battling to win approval for his $800bn (£490bn) fiscal stimulus package.

"Although the job losses continued in major industry sectors in August, the declines have moderated in recent months," the the labour department said.

However, some economists warned that US firms need to start creating more jobs in the coming months if a long-term recovery is to get underway.

John Canally, an analyst at LPL Financial in Boston, said, "the tension between now and the end of the year lies in the question of whether, after the support provided by the government's stimulus package, the private sector can stop shedding jobs in time to help the economy stay on a sustainable recovery."

Dominique Strauss-Kahn, managing director of the International Monetary Fund, used a speech in Berlin today to warn that the global economic crisis has moved into a third wave - from finance, to the real economy, to unemployment.

"We expect unemployment to continue rising through next year, as economic growth falls short of potential. And a jobless recovery remains a risk," Strauss-Kahn said. "Having so many people out of work has significant economic costs, ranging from lower private demand to a decline in potential growth if structural unemployment rises. The social consequences are potentially even more worrisome."