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Tue, Mar 12, 2002 - Page 21 News List

Global job market poised to recover

UNEMPLOYMENT While hiring in the service sector appears to be gaining steam, manufacturers are still reluctant to add more workers until they see demand pick up

BLOOMBERG , CLERMONT-FERRAND, FRANCE

Geraldine Favre joined the ranks of France's 2.4 million job-seekers in September, the same month that terrorists rammed hijacked planes into the World Trade Center and the Pentagon.

"It was the worst time," recalls Favre, who had just left a sports Internet company she helped start. "Interviewers were more confrontational. Some didn't even bother to follow up."

In January, the 24-year-old was hired by the marketing division of Michelin & Cie, Europe's No. 1 tiremaker. And she's still getting follow-up calls from other companies.

Six months after the attacks set off firings that threw 1.1 million in the US and 500,000 in Europe out of work, companies are starting to hire again. That should help a global recovery, economists said.

The US economy added jobs for the first time in seven months in February and the unemployment rate fell to 5.5 percent, figures showed. US retailers had their biggest monthly sales gains in almost two years that month, prompting Federal Reserve Chairman Alan Greenspan to say last week a recovery was "well under way."

In Europe, the German economy lost the fewest jobs in 14 months in February, while there were 5,000 new French job-seekers in January, the smallest increase in seven months.

The turnaround suggests that employment, which a decade ago recovered nearly a year after the economy pulled out of recession, now responds more quickly to rising growth.

"Labor markets are lagging a lot less," said Paul Donovan, global economist at UBS Warburg. "Companies are swifter to respond, because you have a lot more part-time and temporary workers."

Service companies, especially travel, leisure and airlines, are hiring to fill jobs lost post-September. "We're coming out of the doldrums," said German airline Deutsche Lufthansa AG's spokesman Thomas Ellerbeck. "The hiring freeze is lifted."

Euro Disney SCA is adding 2,000 staffers to an existing 11,000 as it opens a new suburban Paris theme park. Southwest Airlines Co plans to employ 4,000 this year, and UAL Corp's United Airlines will rehire 1,200 flight attendants it laid off as part of 20,000 post-September firings. Financial-services companies are also recruiting, though not enough to offset last year's job losses, which totaled 33,000 in the securities industry alone. Allianz AG plans to quadruple the financial advisers at its Advance Holding AG unit to 1,700 by the end of 2008. New Jersey's Commerce Bancorp will take on 8,000 workers by 2006 as it boosts its East Coast business.

Few new jobs are in manufacturing. French manufacturers shed a net 9,900 jobs in the fourth quarter, while payrolls at service companies rose by 36,300. Carmakers are the exception: Bayerische Motoren Werke AG and DaimlerChrysler AG created the most jobs last year in Germany.

In some cases, people laid off by bankrupt companies are being taken on by rivals. UBS AG bought an energy-trading Web site from Enron Corp, the collapsed US energy-trading firm, and hired 625 former Enron employees to staff it. Groupe Seb SA of France is hiring some of the 4,400 people fired after rival home-appliance maker Moulinex SA went bust.

Employment at US help supply service companies, considered a leading indicator of the labor market, rose 14,000 last month, the first increase since September 2000.

"The general sense is one of optimism," said Reesa Staten, a vice president at the job-placement firm Robert Half International Inc. "As workloads increase, often companies will bring in temporary workers until they feel confident enough to bring in full-time staff."

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