In the firing line: 3,300 jobs gone in 3Q

Manufacturing has now seen 8 consecutive quarters of job losses.

Total employment fell by 3,300 in 3Q amidst subdued global economic conditions and internal economic restructuring, data from the Ministry of Manpower show.

In a separate report, Citi notes that this is the second instance of quarterly net jobs contraction since the global financial crisis in 2008-09 (with the previous instance in 1Q15 at 6,100, attributed to seasonal factors).

Job losses were led by construction and manufacturing, with the latter seeing an 8th consecutive quarter of job losses.

Job losses in construction – the first since 1Q15 - were attributed to declines in private sector construction activities, while job creation in services was the slowest since 1Q15. Redundancies were 18.5% higher than a year ago, but fell sequentially with services continuing to contribute most to the total number of layoffs (59%).

Citi commented that detailed jobs report and 4Q unemployment are key signposts to MAS policy action.

"The direction of 3Q job market weakness was likely anticipated by MAS, which noted an emerging slack in the labour market, as the labour market pressure indicator turned negative in 1H16. However, it is unclear if the extent of 3Q contraction was fully expected, as MAS had expected total employment growth in 2016 to stay modest – while 3Q job creation was negative, job creation totaled 13,900 year to date, vs 16,000 a year ago," it said.

With MAS expecting overall and resident unemployment rates to rise in the near term," Citi said it would keep a close eye for revisions in the 2nd jobs data release in mid-December.

"As previously noted, the hurdle for an inter-meeting move, while stringent, may not be prohibitive, with intensified disinflationary pressures from a worsening jobs market being a possible trigger, alongside 4Q GDP contraction," Citi explained.

The brokerage firm suspects that MAS may prefer to wait till the prelim 4Q jobs data in late January 2017 to assess if job market deterioration has been worse than expected.

Should negative jobs creation persist into 4Q (despite a likely seasonal uplift from year-end festivities) risk of an inter-meeting move in late January could remain elevated, it added.