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Quick takes: Unemployment rate for Singapore citizens lacklustre at 6-year high
SINGAPORE'S headline unemployment rate for the fourth quarter of last year rose slightly to 2.2 per cent, from 2.1 per cent in September 2016.
Some 5,300 workers were laid off in the fourth quarter of 2016, higher than the third quarter (4,220), but similar to a year ago (5,370).
For the whole of 2016, local employment increased by an estimated 10,700 (or 0.5 per cent) in 2016. In contrast, foreign employment (excluding foreign domestic workers) contracted in 2016 (-2,500 or -0.2 per cent) - the first time since 2009, according to the Ministry of Manpower on Thursday.
Here are some comments from economists:
Ng Weiwen, ANZ:
"...the headline print disguises the lackluster unemployment rate for citizens which jumped to a multi-year high.
"Today's dismal labour print -particularly resident unemployment reinforce our view that domestic cost pressures will be muted owing to a subdued labour market which will put a lid on wage growth.
"Furthermore, a moderation in commercial rentals will exert a strong disinflationary drag. With activity set to stay subdued, core inflation pressures will be held firmly in check. We forecast core inflation to increase only modestly to 1.3 per cent into 2017 from 0.9 per cent in 2016, at the lower half of the Monetary Authority of Singapore's (MAS) expectation of 1-2 per cent.
"While the effect of subdued demand has been clear in the real sector and labour market, the financial sector implications of persistently soft activity bear watching into 2017, particularly in non-performing loans."
Selena Ling, Head of Treasury Research & Strategy, OCBC Bank:
"The overall unemployment rate edged up to 2.2 per cent in Q4 2016, the highest since Q4 2010 (also 2.2 per cent), whilst that for residents and citizens rose further to 3.2 per cent and 3.5 per cent...which were also the highest since Q1 2010 and Q4 2009, respectively.
"The uptick was partly due to the slower business conditions, economic restructuring and increased labour force participation. However, the uptick in unemployment was particularly affected residents aged 30-30 and >50, as well as those with secondary and degree qualifications, suggesting some churn due to economic restructuring efforts.
"Looking ahead, we anticipate the domestic labour market will continue to soften due to a combination of a sluggish domestic business conditions coupled with an uncertain external business climate due to Trump's policy uncertainties and the continued slowdown in China.
"This could drag the overall unemployment rate higher to around the 2.5 per cent this year, and the net employment data could moderate further or risk another contraction in the quarters ahead. Given more cautious hiring intentions, nominal wage growth is likely to slow, and real wage growth could also stagnate with headline inflation reverting to positive territory."