'We are facing the greatest economic challenge of our lifetime. We will have to act swiftly to resolve it,' a sober Mr Obama said, with members of his heavy-hitting team of economic advisors standing behind him.

Mr Obama however downplayed expectations of a swift rollout of cabinet level officials, including secretary of the Treasury and secretary of state, saying he would move with 'deliberate haste' to get the decisions right.

And he thanked President George W. Bush for his offer of a smooth transition of power and signalled he would not attempt to intervene in economic policy before his inauguration on Jan 20.

The press conference reflected a shift in tone towards Mr Obama after the more informal intensity of the election campaign, as reporters stood when he entered the room hosting the press conference and addressed him as 'Sir' or 'Mr President-elect'.

He said that 'with certainty' he would back a stimulus package passed in the US Congress before or after his inauguration, and that he would put a high priority on initiatives to help the crippled US auto industry.

Mr Obama also confirmed that he had been sent a letter from Iranian President Mahmoud Ahmadinejad following his victory over Republican John McCain on Tuesday.

'I am aware that the letter was sent,' he said. 'I will be reviewing the letter from President Ahmadinejad and we will respond appropriately.'

However he said that Iran's development of nuclear weapons was 'unacceptable' and the Islamic Republic must end its 'support of terrorist organisations'. Mr Obama said during his campaign that he would explore the possibility of direct talks with US foes like Iran, North Korea and Cuba as president.

On a lighter note, Mr Obama said tongue-in-cheek that the issue of the dog he had promised his daughters if he captured the White House was a 'major issue' and that he had spoken to all the living ex-US presidents as he prepares for office.

The president-elect also said he had reread some of the writings of his political hero, former US president Abraham Lincoln.

The press conference, following a meeting with his economic advisors, came on another brutal day for the US economy.

Official figures showed the US unemployment rate rose to its highest level since 1994 in October, 6.5 per cent.

The Labour Department said 240,000 jobs had been cut in October, the 10th straight month of job losses, and new revisions meant that a whopping 651,000 workers have lost their livelihoods in the past three months alone.

But Mr Obama's aides said there would be no further personnel announcements on Friday, following the incoming president's selection on Thursday of combative Illinois congressman Rahm Emanuel as his White House chief of staff.

Mr Obama started his third day as president-elect with a parent-teacher meeting at his two daughters' school with his wife Michelle, a reminder that the next First Family will be the youngest in decades.

He held more meetings to plan his transition to the White House, and was getting his now-daily classified intelligence briefing from the CIA.

Aides said Mr Obama would call more foreign heads of government after speaking on Thursday with the leaders of nine US allies - Australia, Britain, Canada, France, Germany, Israel, Japan, Mexico and South Korea.

The global financial crisis, the Afghanistan war, climate change and the North Korean and Iranian nuclear crises dominated the conversations, according to accounts from the various capitals.

Most of the allied leaders are to attend an emergency summit of 20 nations on the economic crisis in Washington on Nov 15. The White House has said Mr Obama will not be at the event.

Several people mentioned as potential Treasury secretary, including Lawrence Summers and former Federal Reserve chief Paul Volcker, were at the meeting on the economy, which also included vice-president-elect Joseph Biden. -- AFP

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