The jobless rate fell to 3.4 percent from 4.5 percent in the second quarter, the Manpower Ministry said. That was the lowest level since the quarter that ended June 2001.

The decline is the first sign that an economic recovery is accelerating the pace of job creation. Singapore, which expects its economy to expand as much as 9 percent in 2004, is using tax breaks and other incentives to attract investment from pharmaceutical companies like Pfizer as disk-drive manufacturers move factories to Malaysia and China, where labor costs are lower.

"The pace of improvement comes as a surprise - that it jumped so much in such a short space of time," said Song Seng Wun, an economist at G.K. Goh Research. "Whether people are in a big hurry to hire is debatable, against a backdrop of rising energy costs and the uncertainty about the outlook for the next 12 months."

Singapore added jobs even as its economy unexpectedly shrank in the third quarter, ending a year of expansion. Record-high oil prices are curbing growth in the United States, restraining demand for Singapore's exports of electronics products.

The economy contracted at an annual pace of 2.3 percent from the second quarter, seasonally adjusted, the Trade and Industry Ministry said last month, compared with an 11.9 percent growth rate in the previous quarter. From a year earlier, the economy grew 7.7 percent.

Singapore's economy added 16,600 jobs in the three months to Sept. 30, the Manpower Ministry said, compared with 10,900 jobs created in the second quarter, 13,700 in the first quarter and 16,200 in the fourth quarter of 2003. The number of unemployed was 69,700 on a seasonally adjusted basis.

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