The surge in new hires could signal rising inflation, but economists say the government will hold off on drastic cooling measures as the global economic outlook remains unclear.

Singapore's economy added 61,900 new jobs in the second quarter, the highest quarterly rise on record, the ministry said.

Price pressures from the tight labor market pose a challenge to Singapore's policy makers, who must balance domestic inflationary concerns with the need to keep exports competitive. The city-state said last week consumer prices in June rose 1.3 percent from a year earlier, underpinned by higher food and transport costs.

The job growth in the second quarter was led by accelerated job growth in the manufacturing and construction sectors, while the services-sector expansion held at a steady pace.

The strong demand for labor comes as Singapore's economy expands at a robust pace, fueling a surge in real estate prices that has caught the attention of the government. Singapore's private home prices rose 8.3 percent in the second quarter from the first, the fastest pace since 1999.

"There's a tight labor market, and housing prices are rising, but the measures (the government) has brought up will still only have a limited impact," said Chua Hak Bin, an economist at Citigroup.

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