Bloomberg the Company & Products

Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Job Market Resilience May Limit Asia’s Policy Easing: Economy

Don't Miss Out —
Follow us on:
Job Market Resilience May Limit Asia’s Policy Easing
Office workers walk underground during lunch time in Singapore's central business district. Photographer: Bryan van der Beek/Bloomberg

March 2 (Bloomberg) -- Asia’s job markets are holding up even as the European crisis hurts exports, auguring stability in domestic demand that reduces the case for the region’s central banks to add monetary stimulus.

Two-thirds of Asian employers surveyed by Hays Plc, the U.K.’s biggest recruitment firm, said they plan to raise salaries by at least 3 percent this year, while 54 percent anticipate giving bonuses to more than half of their workers. Singapore’s unemployment rate fell to a 14-year low of 2 percent in 2011, Hong Kong’s January rate matched levels not seen since 1998, while South Korea’s is near the lowest since early 2008.

“We have tight labor markets across Asia,” said Frederic Neumann, Hong Kong-based co-head of Asian economic research at HSBC Holdings Plc. “Rather than sit back and let inflation rise again, policy makers will want to be proactive and tighten the screws before it becomes a problem. We could even see rate hikes coming through at the end of the year.”

South Korea and Malaysia are forecast to hold off on interest-rate cuts next week as a jump in oil prices adds to inflation risks. With the U.S. Federal Reserve pledging to hold its benchmark near zero until late 2014, and the European Central Bank expanding liquidity injections, the disparity in monetary policy with Asia underscores forecasts for the region’s currencies to strengthen.

Exchange Rates

Indonesia’s rupiah may gain 3.6 percent by year-end, according to the median forecast of analysts surveyed by Bloomberg News. South Korea’s won may advance 3.1 percent, with 1.5 percent gains for Singapore’s dollar and the Philippine peso.

Stocks in the region that’s led global growth outperformed U.S. and European benchmarks so far this year, with the MSCI Asia Pacific Index up about 13 percent, compared with a 9.3 percent gain for the U.S. Standard & Poor’s 500 Index and a 9.2 percent rise for Europe’s Stoxx 600 measure. The Asian gauge is set today to extend its longest weekly winning streak on record.

Financial companies are adding to payrolls in Asia even as they cut back elsewhere, underscoring the region’s lure. HSBC, which aims to cut 30,000 jobs worldwide, may expand its Asia-Pacific headcount as much as 5 percent by the end of 2013, the bank said last month. Standard Chartered Plc, the U.K. lender that earns most of its profit in Asia, plans to hire as many as 2,600 employees after posting its eighth annual record earnings.

Even in Japan, which suffered its third year of economic contraction in the past four in 2011, the jobless rate has dropped in the past year, to 4.6 percent in January from 4.9 percent a year before, a government report showed today.

Thai Confidence

Thailand today reported that consumer confidence rose for a third straight month, adding to signs of recovery after the country’s worst floods in almost 70 years. An index measuring sentiment climbed to 65.5 from 64 in January, the University of the Thai Chamber of Commerce said in a statement in Bangkok today. The gauge is based on a survey of 2,233 respondents.

The reading for the employment component of China’s manufacturing purchasing managers’ index rose to 49.5 last month, the highest since October, the Beijing-based National Bureau of Statistics and Federation of Logistics and Purchasing reported yesterday. A number below 50 signals contraction.

Meanwhile, data in Europe today may underscore mixed fortunes across the continent. In Germany, a release is forecast to show retail sales grew 0.5 percent in January from December. Spain’s Labor Ministry may report registered unemployment rose 80,000 last month in a country where almost half of young people are out of work. The Italian economy probably grew 0.3 percent in 2011, one-fifth of 2010’s pace, a Bloomberg survey showed.

In the U.S., the Institute for Supply Management-New York Inc. will release its summary of New York area business conditions.

Global Share

Asian companies endured supply shocks in the past year including Japan’s earthquake and tsunami, and Thailand’s floods, to keep churning out components for Apple Inc. and Toyota Motor Corp. The region exported $4.69 trillion of goods in 2010, accounting for about a third of the global shipments, according to the World Trade Organization.

“Companies dusted off their copy books from 2008 and implemented crisis-response measures to stay afloat,” said Wai Ho Leong, a senior regional economist at Barclays Capital in Singapore. “They understood this was going to be temporary and that it made sense to hang on to their labor force. Companies responded by trimming down their inventory holdings and by and large, there were no significant job losses.”

Rate Cuts

Central banks in nations from Indonesia to Thailand lowered interest rates last year to guard against the impact of Europe’s crisis. The Philippines yesterday also lowered its benchmark rate for a second straight meeting.

With limited slack in job markets and energy prices escalating, some monetary-policy makers may need to shift gears later this year should threats to the global expansion continue to diminish. Europe’s agreement on a second bailout of Greece spurred optimism the euro area crisis will abate, with Italy’s two-year note yields dipping below 2 percent for the first time since 2010 yesterday. U.S. unemployment has also declined, auguring sustained economic growth this year.

In Taiwan, the number of workers on unpaid leave has dropped by more than 40 percent since the start of the year, and the jobless rate in January was the lowest since 2008, according to government data. Singapore’s employers added the most workers in seven quarters in the three months through December, even as the economy shrank.

1999 Low

Malaysia’s unemployment rate fell to 3 percent in the last quarter of 2011, near the lowest since 1999, from 3.1 percent in the July to September period. The central bank refrained from cutting rates at its most recent meeting in January after last raising its benchmark in May.

“The jobless rate remains low in most economies, even as growth has slowed, suggesting that firms are confident that the current lull in demand will be temporary,” said Glenn Levine, an economist at Moody’s Analytics in Sydney. “The other key driver is domestic demand, which is holding up well.”

Meantime, oil prices have advanced 26 percent in the past six months. The jump will “translate into higher consumer prices,” said Chua Hak Bin, an economist at Bank of America Merrill Lynch in Singapore.

The Reserve Bank of Australia has already opted to hold off on adding stimulus, unexpectedly foregoing last month the rate cut that a majority of economists surveyed by Bloomberg had anticipated. The bank is forecast to again keep its benchmark unchanged next week. Australia, whose economy is linked to China through its exports of coal and iron for Chinese factories, may be a bellwether for other economies in the region.

“The RBA is generally a good gauge of what central banks across Asia will soon be doing,” Levine of Moody’s Analytics said. “Bank Indonesia has cut rates a couple of times already, but is now likely to pause, as the outlook is still good. Korea, Malaysia and India are all on hold.”

To contact the reporter on this story: Shamim Adam in Singapore at

To contact the editor responsible for this story: Stephanie Phang at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.