Labour market resilience holds despite layoff headlines

Unemployment seen staying low at 2.1%

The labour market remains broadly resilient despite recent headlines highlighting a rise in layoffs, according to Nomura.

The report referenced media coverage, including Bloomberg’s, which points to layoffs reaching a near three-year high amid corporate restructuring.

It added that labor conditions have stayed broadly steady despite external shocks, including U.S. tariff uncertainty and geopolitical tensions.

Data from the Ministry of Manpower Singapore indicates that the recent increase in retrenchments has been concentrated amongst non-resident workers, particularly in sectors such as construction.

The ratio of job vacancies to unemployed persons eased slightly to 1.46 from 1.58, but continues to point to a relatively tight labour market.

Nomura see this as a sign of gradually improving labour matching, whilst overall demand for workers remains firm.

The unemployment rate held at 2.0%, remaining below pre-pandemic levels of 2.2%.

Additionally, the report noted that artificial intelligence (AI) adoption amongst firms is increasing, although clear signs of AI-driven job displacement remain limited at this stage.

Looking ahead, Nomura expects the labour market outlook to remain stable, with unemployment forecast at 2.1% in 2026.

It noted that this is broadly aligned with its above-consensus GDP growth expectations of 4.6%, supported by multiple growth drivers.

However, Nomura expect core inflation to accelerate in the coming months. “We still expect core inflation to rise sharply in coming months,clikely lifting domestic interest rates with it, given thecpositive output gap and stable labor market conditions,” it said.