"Despite strenuous government efforts, the jobs crisis continues unabated, with one in three workers worldwide, or an estimated 1.1 billion people, either unemployed or living in poverty," said ILO director-general, Juan Somavia, in the Global Employment Trends 2012 report.

"What is needed is that job creation in the real economy must become our number one priority," he said.

"Whether we recover or not from this crisis will depend on how effective government policies ultimately are."

The report said governments must coordinate and act decisively "to reduce the fear and uncertainty that is hindering private investment so that the private sector can restart the main engine of global job creation."

ILO senior economist Ekkehard Ernst said at a press conference the recovery started in 2009 was short-lived and there were nearly 29 million fewer people in the labour force now than "would be expected based on pre-crisis trends".

"Our forecast has become much more pessimistic than last year, with the possibility of a serious deceleration of the growth rate," he said.

The report refers to "discouraged workers", those who have decided to stop looking for work because they feel they have no chance of finding a job and are considered economically inactive.

"If these discouraged workers were counted as unemployed, then global unemployment would swell from the current 197 million to 225 million, and the unemployment rate would rise from six per cent to 6.9 per cent," Ernst said.

Young people continued to be the hardest hit by the jobs crisis.

"Judging by the present course," the report says, "there is little hope for a substantial improvement in their near-term employment prospects."

The ILO says 74.8 million youths aged 15-24 were unemployed in 2011, an increase of more than four million since 2007 in the total global labour force of 3.3 billion.

Globally young people are nearly three times as likely as adults to be unemployed. The global youth unemployment rate, at 12.7 per cent, remains a full percentage point above the pre-crisis level.

Ernst and fellow ILO economist Moazam Mahmood recommended additional public spending "to support both the domestic and global economies."