In the third quarter of 2025, Singapore’s seasonally-adjusted overall unemployment rate remained at 2.0%, unchanged from the prior quarter. This marks the highest unemployment rate in five quarters, signalling a labour-market plateau rather than a sustained improvement.
For residents (Singapore citizens and permanent residents), the unemployment rate stood at 2.8%, while among Singapore citizens it remained about 3.0%. Meanwhile, overall employment rose by 24,800 in Q3, up from about 10,400 in Q2.
Thus, the data presents a mixed story. On one hand, employment continues to grow; on the other, the jobless rate remains elevated compared to recent quarters, raising questions about the resilience and inclusivity of the labour market.
What’s Driving the Trends?
Growth in Employment
Several sectors showed decent hiring gains in Q3. Employment in manufacturing rose by about 5,400 from the previous quarter, while construction employment jumped by an estimated 13,700, compared with 5,800 in Q2. Employment in the services sector (excluding migrant domestic workers) grew by about 10,300, the largest increase since Q3 2024.
These gains suggest that certain parts of the economy are holding up, especially sectors linked to domestic infrastructure, industry and services.
Unchanged Unemployment Rate
Despite these employment increases, the jobless rate didn’t move downward. The stable 2.0% figure shows that while jobs are being created, they may not be keeping pace with labour-force growth or meeting expectations across all segments of the workforce.
Analysts note that, in many outward-oriented industries (such as professional services, information & communications), resident employment growth remains “relatively muted”. Furthermore, the labour-force participation rate is already high, especially for residents, which may limit further drops in unemployment.
Broader Context
Globally, many economies that enjoyed ultra-low unemployment are now seeing slight upticks or stagnation as structural changes, automation, and cost pressures weigh. Singapore is not immune to those headwinds.
In Q2 2025, for example, youth (below age 30) resident unemployment edged up slightly to about 5.7%. The fact that younger workers and certain sectors are facing tougher conditions suggests labour-market slack may be emerging in pockets.
Why the Jobless Rate Matters
Indicator of Labour Market Tightness
When unemployment is very low and falling, it typically signals a tight labour market. Under such conditions, wage growth often picks up and firms face pressure for talent. The fact that Singapore’s overall unemployment is holding at 2.0%—while not immediately alarming—suggests that the market may be beginning to soften its tightest phase.
Impact on Wages and Inflation
A key concern for policymakers is how labour‐market dynamics feed into wages and inflation. A more relaxed labour market might temper wage growth, which could ease inflation pressures. This interplay is relevant for the Monetary Authority of Singapore (MAS) and other economic agencies as they calibrate policy.
Inclusivity and Resident Outcomes
While employment overall is rising, the resident unemployment rate (2.8%) remains higher than the headline 2.0%. This gap shows that jobs are not being equally distributed between residents and non-residents. Moreover, younger and older worker cohorts may face greater risk. Ensuring that all segments of the workforce benefit from economic growth remains a central policy objective.
Structural Shifts and Economic Resilience
The jobless rate also acts as a barometer for structural change. As Singapore pivots toward higher-value sectors, digital economy roles, and automation, workers in older industries may face slower demand. A stable unemployment rate amid growth may hint that transitions are underway but are not yet fully absorbed by the labour market.
What the Policymakers Are Saying
The Ministry of Manpower (MOM) noted that the labour market remains on a “resilient footing” even amid global uncertainties. They also flagged that resident employment growth may lag non-resident employment — a point of concern for inclusive growth.
At the same time, wage growth is expected to moderate, according to reports. MAS, in its recent surveys, also signalled that policy settings will likely remain unchanged, underscoring confidence in the current labour and economic outlook.
Sectoral Nuances and Good News
Construction and Manufacturing Gains
The sharp increase in employment in construction and manufacturing offers bright spots. For example, construction added about 13,700 jobs in Q3, suggesting infrastructure and industrial projects are ramping up. This bodes well for workers in more traditional sectors.
Service Sector Growth for Residents
Resident employment gains concentrated in health and social services as well as financial services, pointing to structural trends aligned with Singapore’s strategic economic shift.
Retrenchment and Long-Term Unemployment
Retrenchments in Q3 remained similar to Q2, at about 3,500 for the quarter. The long-term unemployment rate among residents remains low (0.9%) and shows that joblessness of extended duration is still limited.
Risks, Pockets of Weakness & Warnings
Outward-Oriented Sectors
Some industries exposed to global headwinds—such as professional services, information & communications, and wholesale trade—are already showing signs of weaker hiring sentiment. For instance, job-vacancy ratios in some of these sectors are slipping.
Youth Employment Concerns
The uptick in unemployment for younger workers (below age 30) is worth monitoring. At 5.7%, this cohort faces a significantly higher jobless rate than the average. A delayed labour-market entry for youth can have long-term consequences on career progression and earnings.
Wage Growth Outlook
Moderating wage growth may support cost-control for businesses. But if wages stagnate too much, it could dampen consumption and broader economic momentum. Analysts warn that the alignment between labour costs, inflation and growth remains delicate.
External Uncertainties
Global trade tensions, slowing demand in key export markets, and supply-chain disruptions all pose risks to Singapore’s employment landscape. The economic strategy review announced in August 2025 underscores the government’s awareness of these structural threats.
What to Watch Going Forward
- Next labour-market readings: If the unemployment rate remains at or above current levels next quarter, it could signal that the labour-market softening is becoming entrenched.
- Wage growth and recovery: Monitoring how wages evolve will be critical to understanding the labour-market tightness and its inflation implications.
- Youth employment and training: How effectively Singapore channels fresh graduates and younger workers into jobs or traineeships will matter for long-term labour-market health.
- Sectoral hiring trends: Shifts in hiring demand across outward-oriented vs domestic-facing sectors will highlight where job-growth risks and opportunities lie.
- Policy responses: Government and MOM support measures — such as traineeship programmes, upskilling initiatives, and structural reforms — may pick up pace if labour-market slack deepens.
In Summary
Singapore’s labour market in Q3 2025 reflects a state of cautious stability. The 2.0% overall unemployment rate remains unchanged and marks the highest in five quarters. Despite employment gains — led by construction, manufacturing and some services — the jobless rate did not drop further, indicating the labour market may be losing momentum.
On the positive side, low long-term unemployment and healthy job-creation in key sectors show resilience. However, the fact that younger workers and residents in certain industries face higher risks signals that the next phase of Singapore’s labour transition will need targeted support.
For now, policymakers are in watch mode. They will need to navigate the twin objectives of maintaining employment momentum while ensuring that growth is inclusive, wages are sustainable and workers are prepared for the structural shifts ahead.
