Tuesday, November 25, 2008

Jobless to hit 8 million : OECD

A man wears a sign that reads 'almost homeless' and walks through Times Square seeking employment
. -- PHOTO: AP

PARIS - THE number of unemployed in leading industrialised nations is set to rise by eight million in the next two years as rich countries battle their worst recessions in 25 years, the OECD said on Tuesday.

'Jobless numbers could rise to 42 million by 2010 from 34 million currently,' the OECD said in a report, forecasting the jobless rate to rise from 5.5 per cent in early 2008 to 7.25 per cent in 2010.

The figures are for the 30-country OECD area which includes North America, most of Europe and leading industrialised Asian and Pacific nations.

'Historical experience suggests that youth, immigrants, low-skilled and older workers are more likely to bear the brunt of rising unemployment,' the OECD said in a statement released with its biannual Economic Outlook report.

'Workers holding temporary contracts are also particularly vulnerable to an economic downturn,' it added, highlighting the auto and construction industries as sectors that were shedding jobs.

The rise in unemployment is set to be most pronounced in countries which have been hit hardest by the financial crisis.

By the end of 2009, the unemployment rate was forecast to be at least 2.0 percentage points higher than at the end of 2007 in the United States, the United Kingdom, Iceland, Ireland, New Zealand and Spain.

The rate would rise by between 1.0-2.0 percentage points in nine other OECD countries, including France, Italy, Canada and Australia.

In the United States, the origin of the financial crisis and the world's biggest economy, the unemployment rate rose to 6.5 per cent in October and an estimated 2.8 million people lost their jobs in the last 12 months.

The US jobless rate was forecast to peak at 7.6 per cent in the first quarter of 2010, while unemployment in the eurozone would reach a maximum 9.1 per cent in the same period.

Unemployment in Japan was forecast to rise from 4.1 percent this year to about 4.4 percent for 2009 and 2010.

In its report on Tuesday, the OECD warned that many leading industrialised nations faced their worst economic downturn for 25 years, with the US, European and Japanese economies set to shrink next year.

Unemployment will rise by eight million, house prices will continue to fall in many countries and there is a risk the financial crisis has further to run, with fragile banks exposed to new bad debts.

'Many OECD economies are in or are on the verge of a protracted recession of a magnitude not experienced since the early 1980s,' said OECD chief economist Klaus Schmidt-Hebbel. -- AFP

Jobless to hit 8m: OECD
Straits Times, Singapore