The Labour Department's report, released yesterday, also indicated that the nation's unemployment rate dipped from 4.9 per cent in January to 4.8 per cent last month as hundreds of thousands of people - perhaps discouraged by their prospects - left the civilian labour force.

Job losses were widespread, with hefty cuts coming from construction, manufacturing, retailing, financial services and a variety of professional and business services. Those losses swamped gains elsewhere, including education and health care, leisure and hospitality and the government.

The latest snapshot of the nation's employment climate underscored the heavy toll of the housing and credit crises on companies, jobseekers and the overall economy.

"It's clear our economy has slowed," President George W Bush said.

To provide relief to persistent credit problems, the Federal Reserve announced yesterday that it will increase the amount of loans it plans to make available to banks this month to USD100 billion.

It has already provided a total of USD160 billion in short-term loans to cash-strapped banks since the auctions began in December. Another Fed step will involve making USD100 billion available to a broad range of financial players through a series of separate transactions.