Decline Predicted In Employment Growth In Industrialized World

June 19, 2007
OECD predicts jobless rate would come to 5.5% in 2008.

The OECD said June 19 it foresaw a slowdown in unemployment declines next year in the world's leading industrialized states as overall economic momentum cools, notably in the U. S. The group also predicted a weaker pace of expansion in employment in 2008 in its 30 members.

The report in addition focused on four non-OECD powerhouses, Brazil, Russia, India and China, where it said rapid economic growth had sparked striking employment gains. From 2000-2005, according to the OECD, an average of 22 million net new jobs were created each year in the four countries, five times the net employment gains in the OECD. The four now represent 45% of world labor supply compared with less than 20% for the OECD's industrialized economies.

The report predicted that the OECD jobless rate, after falling from 5.9% in 2006 would come to 5.5% in 2008. At the same time growth in employment would slow from 1.6% in 2006 to 1.3% in 2007 to just 1% in 2008.

"Economic growth in both 2007 and 2008 is expected to be below outcomes achieved in 2006, mainly reflecting the deceleration in economic activity in the United States," according to the OECD. Output in the 30 countries is projected to slow markedly from 3.2% in 2006 to 2.7% in both 2007 and 2008.

The study concluded that surging employment growth had accompanied declining poverty rates in Brazil, Russia, India and China, notably in China. But all four are likely to see significant population ageing in the next 20 years, reflecting lower fertility rates and improved life expectancy, which the OECD said would have a major "repercussion on projected labor force growth." It forecast that in Brazil labor force growth would be cut by half over the next 15 years compared with the past 15 years.

The report highlighted a substantial improvement in educational attainment in the four countries, notably in Russia, where the availability of educated workers is greater than in the average OECD country.

Copyright Agence France-Presse, 2007

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