Jobs recovery months away: staffing execs

By Nick Zieminski - Analysis

NEW YORK (Reuters) - Any U.S. job market recovery is at least several months away, staffing industry executives say, citing comments from customers, weak consumer spending and evidence in the December jobs report that employers are cutting hours and overtime.

The economy shed 524,000 jobs outside the farm sector last month, fewer than expected, and the unemployment rate jumped to 7.2 percent, the highest since January 1993. Job losses in October and November were bigger than initially estimated.

"When we look at where companies are, in the conversations they're having, we anticipate continued job losses for at least a couple quarters," said Jeff Joerres, chief executive of Manpower Inc, one of the world's largest staffing and outplacement firms.

The North American chief of rival Adecco SA said a decline in overtime and total hours worked suggests more job losses ahead, since employers typically cut hours before they eliminate jobs.

"We have 150,000 clients in the U.S., and I can tell you one company after another is convinced this recession is not going away," Adecco's Tig Gilliam said. He predicts January and February payroll data will show cuts as deep as those seen in the quarter just ended.

"We're in an accelerating job-loss mode," he said.

Adecco is the third largest U.S. employer, behind Wal-Mart Stores and the postal service. Overall, U.S. staffing companies employ almost 3 million people a day and hire some 11 million temporary and contract workers a year, according to the American Staffing Association.

A further negative sign is that professional job categories are losing jobs, said Scot Melland, chief executive of Dice Holdings, which runs specialized job sites focused on areas like finance and technology.

Meanwhile, worker supply is rising, as more people reenter the work force and those anxious about their jobs start to test the waters. Job applications in the latest quarter were up 20 percent versus a year ago, Dice Holdings said.

The unemployment rate is likely to keep rising, but probably will not reach double-digits like it did in the 1970s, Melland said.

"I would look for the first signs of recovery to be toward the second half of this year," Melland said. "This is now a consumer-driven recession."

STIMULUS HOPES

The U.S. job market typically lags the wider economy by three to six months, and so far efforts to stabilize the financial system have not a had a visible effect, Melland said. That underscores the need for a government stimulus that would target consumer spending.

"People who have jobs today don't have the confidence to spend," Adecco's Gilliam said.

U.S. President-elect Barack Obama, who takes office January 20, is seeking approval by mid-February of his plan for tax cuts and public-works spending that could total up to $800 billion.