Barack Obama reveals two-year plan to create 2.5m jobs

Matthew Weaver and agencies

Barack Obama has outlined his plan to create 2.5m jobs in his first two years in office with an ambitious spending programme on roads, schools and and renewable energy.

In his weekly internet address the United States president-elect warned that the US was "facing an economic crisis of historic proportions".

But he suggested he was keen to launch a major two-year spending programme, to "jumpstart job-creation in America and lay the foundation for a strong and growing economy". He pledged the programme would create 2.5 million jobs by January 2011.

That goal has led to speculation that Obama will try to launch a spending package larger than the $175bn (£118bn) plan he outlined in his election campaign.

Obama said details of the programme were being worked out by his transition team.

"We will put people back to work rebuilding our crumbling roads and bridges, modernising schools that are failing our children, and building wind farms and solar panels and fuel efficient cars and the alternative energy technologies that can free us from our dependence on foreign oil," he said.

Both Republican and Democrat support would be needed to get the programme approved, he said, but "what is not negotiable is the need for immediate action".

Noting the turmoil on Wall Street, a drop in house sales, rising unemployment and the threat of deflation, he said: "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."

But Obama said his inauguration day on January 20 "is our chance to begin anew".

"We must do more to put people back to work, and get our economy moving again.

"There are Americans showing up to work in the morning only to have cleared out their desks by the afternoon. These Americans need help and they need it now."

Wall Street ended a volatile week with renewed confidence last night, after reports that Obama had chosen Timothy Geithner, the head of the New York Federal Reserve, as his treasury secretary.

The Dow Jones industrial average recorded a 494-point gain on the day as stocks surged by 6.5% to close above the psychologically important 8,000 level at 8046.42. It was still 5% down for the week, however, as worries persisted about the global economic slowdown.

Geithner, 47, has always been a favourite to take the top job and his appointment was expected to be announced by the Obama camp this weekend.

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