President-elect Barack Obama has warned that without "swift action" millions of American jobs could be lost.

President-elect Barack Obama has warned that without "swift action" millions of American jobs could be lost.

The Democrat, who is sworn is as President on 20 January next year, is devising a two-year plan to boost the failing economy.

"If we don't act swiftly and boldly, most experts now believe that we could lose millions of jobs next year," Obama said in remarks from a radio and video broadcast.

He added: "We now risk falling into a deflationary spiral that could increase our massive debt even further."

Mr Obama's pessimistic outlook is despite a modest market rally yesterday amid claims New York Federal Reserve president Timothy Geithner would join the Obama administration as Treasury secretary.

American stocks saw a six per cent increase at the mention of the highly-regarded 47-year-old.

His rumoured selection came as the New York Times claimed Senator Hillary Clinton would become the new Secretary of State, replacing Condoleezza Rice as the face of America's foreign policy.

The former First Lady, Mr Obama's rival for the Democrat presidential nomination, gives the new administration some international affairs muscle, having sat on the Senate's powerful Armed Services committee.

However, critics will be quick to point out key foreign policy disagreements between the New York Senator and Mr Obama. She called him "irresponsible and frankly naive" after he pledged to meet with leaders of rogue states like North Korea and Iran without precondition.

But Mr Obama's address was more concerned with the financial crisis than personal politics, as he provided details of a plan he said was "big enough to meet the challenges we face." His stimulus package will aim to create 2.5 million new jobs by January 2011 - an ambitious target, with economic plans traditionally limited to one year.

But Mr Obama cautioned: "There are no quick or easy fixes to this crisis, which has been many years in the making, and it's likely to get worse before it gets better."

In his address, Mr Obama revealed he had set his economic team to drafting his plans into a policy.

"We'll be working out the details in the weeks ahead, but it will be a two-year, nationwide effort to jump-start job creation in America and lay the foundation for a strong and growing economy," he told listeners and viewers.

Mr Obama's comments come just days after the US Labour Department released troubling figures showing 540,000 Americans had joined the unemployment rolls - the highest total in 16 years.

Representatives of the car industry have also been negotiating this week with the US government to secure a bailout for their hard-hit businesses.

"The news this week has only reinforced the fact that we are facing an economic crisis of historic proportions," Mr Obama commented.