Latest official predictions say unemployment will peak at 8.3% with employment rising in every year.
Speaking at Prime Minister's Questions, David Cameron said he was "encouraged" by the meeting he had with newspaper editors over the Leveson report.
Culture Secretary Maria Miller has said she expected the industry to come up with a process and timetable today.
Officials at Mrs Miller's Culture Department are drawing up a draft Bill to enact the Leveson recommendations in full.
But she has indicated that she expects it to confirm concerns about the complexity and potential negative impact on press freedom.
Deputy Prime Minister Nick Clegg, who is opposed to Mr Cameron's stance, said he hoped "gridlock" could be avoided in the continuing cross-party talks.
Labour is drawing up its own draft legislation to demonstrate that Leveson's recommendations could be implemented without the difficulties feared by ministers.
The opposition's Bill is expected to be completed before Christmas, paving the way for Labour to force a Commons vote by the end of January if no agreement is reached in cross-party talks.
The result would not be binding on the Government, but a defeat could be hugely damaging for the Prime Minister.
As the editors met at Number 10, Labour leader Ed Miliband hosted talks in his office with representatives of the Hacked Off campaign group, including phone hacking victims.
"What I heard from the victims of sections of the press is that they are pleased there are good intentions from the editors but they want more than good intentions," he said.
"They want the force of law to make sure those good intentions are turned into reality."
He said he did not doubt the goodwill of the editors to reform, "but we have no guarantee that that goodwill and those good words are actually going to mean something on an ongoing basis".
– Lord Black of Brentwood, the Telegraph Media Group executive director
To meet tough deadlines, which the Government is rightly imposing on us, it's going to take a great deal of determination, energy and commitment from the whole industry.
One thing is going to be absolutely vital in the days ahead and that is that the industry must remain united as we seek to implement the Leveson report and put in place a new tough system of regulation which is fit for the future - and which above all else will make the need for statute irrelevant.
David Cameron has told the press that "the clock is ticking" on press regulation.
He also warned newspaper editors that any new regulator had to meet the report's requirements.
– Prime Minister David Cameron
That means million-pound fines, proper investigation of complaints, prominent apologies, a tough independent regulatory system.
And they know, because I told them, the clock is ticking for this to be sorted out.
Newspaper editors will hold crunch talks today after David Cameron warned that "the clock is ticking" to avoid regulation backed by law.
The Prime Minister has told the press it must act fast to convince politicians and the public that Lord Justice Leveson's call for statutory underpinning is not necessary.
The push for an agreement comes as Labour, the Liberal Democrats and victims of media abuses continue to demand full implementation of the judge's recommendations.
Mr Cameron's own party is also seriously split on the need for legislation.
The Prime Minister met newspaper editors in Downing Street today to discuss their response to the Leveson Report on ethics and standards earlier today.
Many editors are thought to favour a new press regulator that takes on board some of Lord Justice Leveson's proposals, but is not underpinned by legislation.
- Sarah Sands (London Evening Standard) said they were "talking about a couple of weeks to try to come up with a solution that really satisfies everybody".
- Chris Blackhurst (Independent) said they agreed that a new regulator would need to have powers to impose large fines and order printed apologies.
- Lloyd Embley (Daily Mirror, Sunday Mirror, The People) said there is "a firm belief that papers can deliver Leveson principles far more quickly without legislation".
- Tony Gallagher (Daily Telegraph) likened today's meeting to "the summoning of the Five Families in The Godfather".
Labour leader Ed Miliband, who met Hacked Off representatives including phone-hacking victims in his office amid the summit of editors in Downing Street, said they wanted "more than good intentions" from the press.
– Ed Miliband
We need the promises that have been made to be put into legislation so that what we actually have is the independent self-regulation but (with the) guarantee of law.
Then we can say to members of the public 'Look, people have suffered in the past but Parliament has stepped up to its responsibilities, we've done the right thing whatever people in the press say... and actually we have ensured other people will not have to suffer in the future in the way that victims have suffered in the past.'