Washington - The US economy shed 598,000 jobs in January, the worst monthly loss since 1974 and a sign that the country's recession is worsening, the Labour Department said Friday.

The unemployment rate climbed to 7.6 per cent, the highest level since 1992, from 7.2 per cent in December, when companies cut 577,000 jobs. Economists had expected a rise in the jobless rate to 7.5 per cent.

About 3.6 million jobs have been shed since the start of the US recession in December 2007, the Labour Department said.

About half of those layoffs occurred in just the last three months as a major financial crisis took hold of the United States and the rest of the world.

The Labour Department said job losses were "large and widespread across nearly all major industry sectors." The government, health and private education sectors were the few that hired workers on the month.

The new figures come amid a furious debate in the US Congress over a massive stimulus package to help revive the country's economy, the world's largest. Economists have warned unemployment could soar into double-digit levels without government action.

President Barack Obama has promised that the more than 800- billion-dollar stimulus plan before Congress will save or create more than 3 million jobs, but the package has stalled in the Senate amid disagreements over its size and scope.

A bipartisan group of lawmakers were meeting Friday to thrash out a compromise on the stimulus bill. (dpa)