Singapore Q2 job layoffs hit 7-year high
published : 28 Jul 2016 at 15:23
SINGAPORE - Job layoffs in Singapore hit a seven-year high in the second quarter while the jobless rate edged higher, in a sign of growing labour market slack at a time when economic growth has been sluggish.
Singapore's unemployment rate rose to 2.1% in the second quarter, a level last seen in the first quarter of 2014, preliminary labour market data from the Ministry of Manpower showed on Thursday.
In January-March, the unemployment rate was 1.9%.
Job layoffs rose to 5,500 in the April-June quarter. That was the highest since 5,980 in the second quarter of 2009, when the city-state took a hit from the global financial crisis and the economy contracted.
The number of layoffs in manufacturing declined from the previous three months "while it increased in services and stayed relatively unchanged for construction", the ministry said.
Total employment grew by 5,500 in the second quarter, down from growth of 13,000 in the first quarter and an increase of 9,700 jobs in the second quarter of 2015.
The increase in layoffs in the services sector is a worrying sign, given that it has been seen as a more stable component of job growth, said Joseph Incalcaterra, an economist for HSBC in Hong Kong.
Still, weakness in the labour market is probably something that the Monetary Authority of Singapore (MAS) has already assumed in its latest assessment on core inflation, which seemed to be higher than before, he said.
"That ultimately all suggests that come this October, there is a very high bar to a change in (monetary) policy," Mr Incalcaterra said, referring to the next scheduled MAS policy review.
The Singapore central bank's current monetary policy stance remains appropriate and only a marked worsening in the global economy or significant shift to the inflation outlook would prompt a change, its managing director said on Monday.
MAS managing director Ravi Menon added that MAS expects core inflation to close in on the historical average of around 2% next year from a likely average of 1% in 2016.