The slide in employment is representative of what the U.S. economy faces for years to come, Pimco co-chief investment officer Bill Gross told CNBC.
A slow-growth scenario continues to play out as consumers who are losing their jobs or are in fear of facing unemployment cut spending and inhibit economic growth, said Gross, who helps manage the world's largest bond fund at Pacific Investment Management.
He spoke after a government report showed the economy lost 467,000 jobs in June and the unemployment rate moved to 9.5 percent.
"Much like we saw with the Depression, attitudes change, and so consumers and investors will now become conservative savers as opposed to spenders," Gross said in a live interview. "Spending as driven by asset appreciation in terms of houses ... that game stops, that game has stopped and we must now move in another direction."
Keeping with his recent forecasts, Gross said real gross domestic product likely will grow at just 1 to 2 percent annually for the next generation or so.
In that type of situation, government will have no choice but to keep up its deficit spending programs to keep the economy moving.
"The question becomes, can we maintain that level of spending?" Gross said. "I think it's necessary over the next year or two simply because the consumer provides a void in terms of the economic hand and so, yes, the government must continue to spend, must continue to provide new forms of stimulus whether it's in the form of low interest rates and monetary policy or fiscal policy going forward."
Yet the government also will have to confront the reality of a weakening currency and the problems that will lead to in terms of global investors willing to put money into the U.S.
It all adds up to a difficult future, he said.
"The talk of three or four months ago in terms of Depression I think is out," Gross said. "But we are looking at stagflation or some type of stagnation in terms of 1 to 2 percent growth for a number of years."