With gross domestic product plummeting and the jobless rate at a 14-year high, U.S. policymakers will have to author at least one more stimulus package in the months to come if they are to elbow aside the impact of high unemployment and depressed consumers.

"Investors have been reluctant to admit that this cycle, unlike 1998’s credit crisis, is imbedded in the real economy," Merrill Lynch & Co. Inc. (MER) investment strategist Richard Bernstein wrote in a research note last month. "The government can come up with any number of refinancing and liquidity plans, but households are likely to increasingly default on mortgages and other debts if cash flow is not stabilized via employment."

The unemployment rate climbed to 6.5% in October – the highest level since 1994. Employers cut 240,000 jobs last month, making October the second-worst month of the year after September, during which 284,000 jobs were shed.

The economy has lost 1.18 million jobs so far this year, according to Challenger, Gray & Christmas Inc. But the worst may be yet to come, as employers last month announced plans to cut 112,884 more positions. That’s a 19% increase from September and a 79% jump from a year ago.

"Year-end job cuts are typically higher than at other times of the year, but the fact that October was significantly higher than recent years suggests that companies not only have been hit hard by this downturn, but they do not see a rebound any time in the near future," said John Challenger, chief executive officer of Challenger, Gray & Christmas.

The pace of hiring has also slowed substantially, the outplacement firm found. Retailers hired the fewest number of holiday workers since 1991, and overall retail hiring fell 19% compared with last year.

The number of people working part-time jobs has soared to 6.7 million, from 3.2 million a year ago, as employers have fewer full-time positions.

"There are now almost 2.8 million people unemployed in the last year chasing fewer jobs," said Challenger. "So far in 2008, we’ve had a net loss of 1.2 million jobs."

Bob Brusca of Fact and Opinion Economics in New York told The Christian Science Monitor that the pace of job losses could soon quicken to 500,000 a month – double the amount of jobs shed in October.

"The important thing is that some of the key indicators are now reading as weak or weaker than these deep recessions," Brusca said. "We have every reason to think this is as bad as a deep recession."

A new analysis by Goldman Sachs Group Inc. (GS) was every bit as dismal as Brusca’s. Goldman says that the downturn has yet to hit full swing, and that job losses could surpass 2 million in 2009, with unemployment climbing to 8%, TIME magazine reported.

"As the economy slides into a deeper recession, it appears we are closer to the beginning of the labor market downturn than the end," wrote the study’s co-author, economist Ed McKelvey. "We anticipate a sharper decline in employment in coming months."

According to McKelvey “lagging” sectors of the economy – such as construction, manufacturing, financial services and retail – will absorb most of the coming losses.

But a big jump in job losses could also exacerbate the ongoing real estate crisis. In June, 45.5% of all delinquencies reported by government-sponsored enterprise and mortgage giant Freddie Mac (FRE) were due to unemployment or the loss of income [For additional details on the current state of the U.S.