GENEVA, Switzerland — Global unemployment rose in 2012 after falling for two straight years and could further increase in 2013, the International Labour Organisation (ILO) has warned in a new report.

A quarter of the increase in global unemployment in 2012 has been in the advanced economies, while three-quarters has been through spillovers into other regions, with marked effects in developing economies in East Asia, South Asia and Sub Saharan Africa.

The number of unemployed worldwide rose by 4.2 million in 2012 to over 197 million, a 5.9 per cent unemployment rate, according to Global Employment Trends 2013.

"An uncertain economic outlook, and the inadequacy of policy to counter this, has weakened aggregate demand, holding back investment and hiring," said ILO Director General Guy Ryder. "This has prolonged the labour market slump in many countries, lowering job creation and increasing unemployment duration even in some countries that previously had low unemployment and dynamic labour markets."

"Also, many of the new jobs require skills that job-seekers do not have," he added. "Governments should step up efforts to support skills and retraining activities in order to address such mismatches which particularly affect young people."

The report shows that global working poverty continues to drop, but at a slower rate than before the crisis.

A middle-income working class is rising in the emerging world, which could provide additional stimulus for the global economy. But for the moment their purchasing power cannot compensate for slow growth in advanced countries.

Looking at the medium term, the forecast global economic recovery is not expected to be strong enough to bring down unemployment quickly, and the number of job-seekers is expected to rise to more than 210 million over the next five years.

The labour market situation remains particularly bleak for the world's youth, with almost 74 million people in the 15 to 24 age group unemployed around the world — a 12.6 per cent youth unemployment rate.

Of particular concern is the fact that more and more young people experience long-term unemployment. Some 35 per cent of unemployed youth in advanced economies have been out of a job for six months or longer. As a consequence, increasing numbers of young people are getting discouraged and leaving the labour market.

Experiencing such long spells of unemployment or dropping out from the labour market early on in the career hurts long-term prospects. It erodes professional and social skills and prevents young people from gaining on-the-job experience.