The unemployment rate is the highest since December 1996 and is a half a percentage point higher than September’s number. October's job losses were the sharpest for any month since May 1980, when 464,000 were dropped from payrolls.

The Labor Department’s report cited a broad and steepening economic slowdown and predicted another cut in interest rates to come November 6 by the Federal Reserve.

Manufacturing, airlines, travel agencies, hotels and retailers were among those posting big losses.

In response to the Labor Department’s report, President George W. Bush asked the Senate to quickly pass an economic stimulus package, saying the surge in unemployment was "not good news for America.

"We need to work together to prevent further loss of jobs by passing an economic stimulus package that in fact will cause the job base to firm up and expand," Bush told reporters after meeting with Treasury Secretary Paul O'Neill and Labor Secretary Elaine Chao.

Bush has called on Congress to pass a stimulus package that would cut taxes by $60 billion to $75 billion. The House has passed a $100-billion package, but the Senate has yet to take action.