A measure of US employment expectations fell to its lowest level since 1982, amid fresh evidence the job market slowdown is rapidly becoming a global phenomenon, according to a quarterly survey by Manpower Inc.
The staffing services company said its seasonally adjusted net employment outlook for the second quarter of 2009 (April-June) fell to a level of minus-1, from 10 last quarter and 15 in the second quarter of 2008. The index measures the difference between employers who plan to add jobs and those who plan to cut them.
“It's a global phenomenon,” said Manpower Chief Executive Jeff Joerres. “It really compounds the effect of the downturn when the whole world gets into it at the same time.”
The depth of the US jobs downturn, and its breadth across a wide range of industries, recalls the recession of the early 1980s, Joerres said, as opposed to the 1991 and 2001 recessions, which were concentrated in the manufacturing and technology sectors, respectively.
So far, the pattern suggests the economy could hit a double bottom, as it did in the 1980s.
Fears of a false bottom - in which jobs and economic growth rebound only to drop off again -- are “more intense than we've seen before,” Joerres said. “It will cause a fair amount of conservatism when we do start to come out of this.”
Hiring prospects weakened in most job categories for the second quarter, with the most pronounced decline in mining. Prospects improved slightly in the US construction and leisure and hospitality sectors, according to Manpower.
Manpower's outlook comes a few days after a government employment report showed 651,000 jobs eliminated outside the US farm sector last month, with the unemployment rate jumping to 8.1%, the highest since 1983.
That rate could peak in the low double-digits, Joerres said, and it will likely take years to get back to 6% US unemployment.
“From the survey and our own conversations with clients, we don't see it getting a lot better in the second quarter, in fact potentially worse,” Joerres said.
Manpower's US survey, based on interviews with about 32,000 employers, dates back to 1962 and is considered a leading indicator of labor trends. The Milwaukee-based company does business in 80 countries and generates the bulk of its profit and sales outside the United States.
Manpower's international survey of 72,000 employers found 23 out of 33 countries and territories reporting their weakest hiring plans since the poll was established there.
In the Asia-Pacific region, some of the weakest prospects are in Singapore, Hong Kong, Japan, Taiwan and New Zealand, while employers in India are more optimistic than three months ago, possibly reflecting the offshoring of some service jobs.
Of the 17 countries surveyed in Europe and Africa, only Austria, France, Italy and South Africa showed stable or slightly higher outlooks. Among the weakest labor markets in Europe are the United Kingdom, Ireland and Spain, partly reflecting pessimism in the finance and manufacturing sectors of their economies, Manpower said.
In Poland and Romania, where the surveys have only recently been established, hiring prospects have weakened for four consecutive quarters.
Manpower said other economies are now moving more in lock step with the United States, where in the past Europe would lag by a few months, and Asian labor markets would turn several months after Europe's did.
“We are in a synchronized economy,” Joerres said. “They're more likely to come out in unison because they're all connected.”
He said governments should act in concert to promote job training and job creation schemes, but it remains to be seen what effect recent stimulus efforts will have on labor markets. (Reuters)