The employment situation has improved in the U.S., U.K. and Japan, but remained difficult in in Europe, the report said. In particular, youth unemployment still remains a grave concern, particularly in southern Europe.
"Policy responses to these challenges (youth unemployment in Europe) remain timid and there is merit in addressing this severe labor market urgently. At the beginning of 2014, the European Commission launched a youth guarantee scheme to tackle youth unemployment in Europe. In many cases, however, there have been delays in its implementation," ILO Director-General Guy Ryder said in the report.
On the plus side, the steep decline seen in oil and gas prices, if sustained, could improve the employment outlook in advanced economies and Asian countries, according to the ILO. But at the same time, oil price weakness is likely to hit labor markets hard in major oil- and gas-producing countries, particularly in Latin America, Africa and the Arab region, the ILO said.
"The trends we see are worrying, but we can improve the overall economic picture if we tackle underlying weaknesses, in particular the continued lack of aggregate demand, stagnation in the euro zone, uncertain prospects for productive investment, especially among small enterprises, and mounting inequality," said Ryder.
The ILO's report came shortly after International Monetary Fund Managing Director Christine Lagarde warned that weak investment, substantial debt burdens and high unemployment were preventing a pickup in global economic growth, despite a strengthening U.S. recovery and tumbling oil prices.
A healthier U.S. economy and cheaper energy "won't suffice to actually accelerate the growth, or the potential for growth in the rest of the world," Lagarde said last week at the Council on Foreign Relations in Washington, U.S.