In bad news for exporters and Australian investors whose portfolios closely track US asset prices, Murdoch has also warned investors and consumers are on strike and says the upcoming presidential election in 2012 could worsen the situation.
"There's humongous unemployment. At least 30 million are either looking, given up looking or have half the job they had before. And it will get worse," Murdoch said in a candid interview with the Australian Financial Review.
"American never gets a recovery without small business starting up in a big way. They are the ones who employ people."
"Big corporations, they just cut or buy out the competitor. People who take a mortgage on their house to start a business, maybe employ 40 people... now they think, let's wait and see."
"People are terrified they will be the next to be unemployed."
Murdoch also hit out at US president Barack Obama, accusing him of refusing to listen to advisers and business leaders.
"Obama's trouble is that he thinks he can make a great speech – he's a great speaker – and it will be done. But nothing gets done."
Murdoch said Obama would find it "impossible to win" the next election if the Republican Party ran a credible opponent.
However, he warned that there would be "total gridlock" from an economic point of view after the 2012 presidential poll and that a new administration would be unable to turn around the economic situation overnight.
Murdoch has also flagged the launch of a new online newspaper called The Daily, which will only be seen on tablet computers such as the iPad.
Murdoch predicts that by the end of 2011 there will be 30 to 40 million iPads in use.
"I believe every single person will eventually have one, even children."
The paper will launch in six weeks and will cost $1 a week. Murdoch says he will need circulation of 800,000 to make the title viable.
Murdoch says the paper will campaign on various issues, starting with US education standards.
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