In September, U.S. payrolls lunged, signaling the economy may be heading for its worst recession in at least a quarter century as the 13-month-old credit crisis on Wall Street is affecting Main Street.

Bloomberg, a business news-wire service, reports that, “employers cut the most jobs in five years in September as cash-squeezed companies pulled back in an effort to bolster pinched profits. In it’s last employment report before Americans choose their next president, the Labor Department said the unemployment rate was 6.1 percent, a climb of 1.4 percentage points from a year before.”

Former Federal Reserve governor Lyle Gramley, now senior economic adviser at the Stanford Group Co. in Washington D.C., warned that “if credit markets remain dysfunctional, the current recession could turn out to be as severe as any in the post war period.”

The widening crisis is also causing reverberations on the campaign trail, as polls reveal that anxious voters increasingly see Democrat Barack Obama as the candidate best positioned to see the U.S. through its economic travails. Since World War II., the unemployment rate has only risen twice in the year leading up to the elections, and in each case the incumbent party lost.

Obama is quoted by Bloomberg as saying, “this country can’t afford Senator McCain’s plan to give America four more years of the same policies that have devastated our middle class and our economy for the last eight years.”

Arizona Senator John McCain, 72, reacted by taking the opportunity to paint his opponent as a tax-and-spend liberal, whose prescription would exacerbate the crisis.

To read the entire article from Bloomberg, link here:

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