With job losses skyrocketing to unseen levels and economic outlook as dour as ever, this year's Christmas may not turn out be as joyful for many of the Americans. In what is supposed to be the most wonderful time of the year, many are losing their jobs while others and are worried about mortgage payments than buying gifts.

A severe credit crunch has forced employers across the nation to slash costs and announce a wave of job cuts. In November itself, the economy lost over half a million payrolls, bringing the total tally of job losses to 1.9 million. The situation worsened in December, with many large employers announcing a slew of layoffs.  

Challenger, Gray & Christmas, a Chicago based a global outplacement consulting firm recently released a report which showed job cuts in the financial-services industry crossed the 250,000 mark for 2008 following Bank of America Corp.'s (NYSE: BAC) announcement of 35,000 job cuts. Earlier, in November, Citigroup (NYSE: C) announced that it plans to chop off 53,000 jobs worldwide, the second-largest job cuts by a U.S. company on record. The forecasts are even gloomier. John A. Challenger, chief executive of Challenger, Gray & Christmas, said in a statement "We probably have not seen the end of major job cuts in the financial sector."

It's not that other sectors have escaped the rout. Telecom giant AT&T said early December that it will shed 12,000 jobs. Dow Chemical Co. (NYSE: DOW), the largest U.S. chemical maker, said that it will eliminate 5,000 jobs and reduce the company’s contractor workforce by about 6,000. Media conglomerate Viacom (NYSE: VIA), office supplies retailer Office Depot (ODP), software maker Adobe Inc.(NASDAQ: ADBE) and DuPont (NYSE: DD), another chemical behemoth have announced massive job cuts.

A recent CBS News poll has confirmed worst fears of retailers, who were eyeing holiday sales. According to the survey, Americans are cutting back on holiday shopping to a degree unseen in two decades. Two-thirds of Americans said they will spend under $500 on holiday gifts this year. For most of the retailers, the holiday season is a break or time. The sector is already reeling under the impact of economic downturn. Retails sales have steadily declined in the backdrop of falling consumer spending. Through the third quarter, 15 major chains filed for bankruptcy, including the second largest electronic retailer Circuit City Stores.

There is no doubt that we are in a painful economic period. Recently, National Bureau of Economic Research said that U.S. has been in a recession since December 2007. The current crisis is being seen as the worst since the Great Depression of 1929. President-elect Barack Obama has vowed to launch the largest investment in U.S. infrastructure since the 1950 and create more than 2.5 million new jobs by 2011.

Bailout of automakers may offer some relief in immediate term as the auto industry employs a huge chunk of population. Hopes of a federal rescue of carmakers were dashed yesterday when Senate rejected the package. However, last heard, White House was trying to find a way to bail out "Big Three." Extending the TARP to carmakers is among the various options discussed. Though it might not be a panacea for all the problems, it will certainly bring Christmas cheers for many families.