US staffing stocks lower after weak jobs report

NEW YORK, April 4 (Reuters) - Shares of U.S. staffing and employment services companies were mostly lower on Friday, after a weaker-than-expected jobs report for March provided fresh evidence a recession is either starting or is already under way.

The U.S. economy lost 80,000 jobs outside the farm sector last month, compared with 60,000 jobs expected, and both January and February job losses were bigger than initially estimated.

The unemployment rate, based on a separate survey, rose to 5.1 percent, the highest since September 2005, the Labor Department said.

The Standard & Poor's HR Employment Services index was down 0.3 percent at 88.42. The index had lost about 12 percent of its value since the start of the year.

The chances of a U.S. recession are about 70 percent, said Tig Gilliam, chief executive of Adecco North America (ADEN.VX: Quote, Profile, Research, Stock Buzz), who earlier this year put the odds at 50-50.

"In my world, it's already begun," he said. "The issue is that professional job growth has slowed dramatically.

"Through 2007 those professional jobs grew fast enough to outweigh the manufacturing and construction (job losses), now we got a situation where the professional space is not growing."

The government report showed a 35,000 job decline in the professional category last month, following 30,000 jobs lost in each of the prior two months.

Gilliam said he expects continued job losses over the coming few months, and sees the unemployment rate reaching at least 5.5 percent this year.