Friday's bleak US payroll data showing another drop in jobs and rising unemployment, combined with this long-term chart of US gross firing and hiring, is not just another sign of the unfolding US recession. It's also a warning for the global economy.

Indeed, the Chicago Fed's National Activity Indicator (CFNAI) - that's the objective summary statistic for US economic growth - is saying that the US recession has begun. Add to that falling US home prices, home-building, car and truck sales, and manufacturing output and airline travel in light of the pressure on US airlines to shrink their fleets in response to weak demand and rising fuel prices. Overall consumer spending (in real terms) has stalled, or at least was flat over the three months to April.

What are the implications for the global economy?

If you take all this, and assume that oil prices will remain at their current levels, there will be damage to global growth, across both the developed and developing world. You can also expect substantial damage to most asset prices.

There are also other danger signals. In a speech to the Commonwealth Club of California last month, Federal Reserve Bank of Dallas chief executive officer Richard Fisher warned about the impact of impact of untethered government debt incurred by the Bush administration, resulting in trillions of dollars in unfunded liabilities from Medicare and Social Security. What's needed, he says, are immediate spending cuts and tax increases would need to be made immediately and these are to be maintained in perpetuity to solve the deficit problem. And even then, the problem will not go away, he says.

"No combination of tax hikes and spending cuts, though, will change the total burden borne by current and future generations. For the existing unfunded liabilities to be covered in the end, someone must pay $99.2 trillion more or receive $99.2 trillion less than they have been currently promised. This is a cold, hard fact. The decision we must make is whether to shoulder a substantial portion of that burden today or compel future generations to bear its full weight."