The Ministry of Manpower (MOM) report paints a bleak picture of the job market in the first three months of this year, the worst since the 2003 Sars outbreak.
The figures show the economy shedding 6,200 jobs, unemployment rising and wages falling compared to the previous quarter. But the report also says a survey of employers shows fewer companies expect hiring to fall from April to this month, compared to the first quarter.
Take the services sector.
Between April and June, the proportion of companies expecting employment to drop is greater than those who see hiring going up - but the gap between them is narrowing. It is 15 per cent, smaller than the 20 per cent recorded in the first quarter.
In other words, while hiring sentiment is still negative, pessimism seems to be receding slightly.
However, half of the eight analysts interviewed by The Straits Times are upbeat about the job market while the other four are pessimistic.
Barclays investment bank economist Leong Wai Ho is positive as union and Government leaders have said that retrenchments from April to June are not as bad as in the previous quarter.
Last month, labour chief Lim Swee Say said that so far in the second quarter, there have been fewer layoffs and shorter work-weeks than in the first quarter.
Said Mr Leong: 'Coupled with our own estimated 17 per cent rebound in the economy in the second quarter, I think the labour market figures will look better sooner rather than later.'
Human resource firm GMP Group's chief executive Annie Yap said there has been a 20 per cent rise in the number of job requests from companies this month, compared to the end of last year.
'Sentiment is rising in a gradual fashion,' she said.
But other economists like Professor Shandre Thangavelu of the National University of Singapore and Singapore Management University Professor Hoon Hian Teck point out that the labour market tends to lag behind the business cycle.
So, the latest MOM figures reflect the weakening conditions at the end of last year, when the economy shrank by 3.7 per cent, noted Prof Thangavelu.
'It might be too soon to suggest we might be hitting the bottom for the labour market as the global economy is still adjusting to the recession,' he said.
Added Nanyang Technological University economics professor Randolph Tan: 'As the economy starts to pick up, the labour market will continue to be in the doldrums for the rest of the year.'
What most of them agreed on is that the wage subsidy Jobs Credit and Spur training subsidy schemes have helped keep unemployment low.
Said Mr Leong: 'I think it is fair to say that the numbers, which are better than expected, are partly the result of Jobs Credit and Spur, which have helped cushion the fall.'
