Malaysia's labour market maintained its momentum in Oct, underpinned by robust tourism activity, sustained investment inflows, as well as improved export performance.
On a YoY basis, the number of unemployed persons continued to decline, albeit at a slightly slower pace of -4.9% (Sep: -5.5%). However, on a MoM basis, the number of unemployed persons increased marginally by +0.1% (Sep: -0.3%). The unemployment rate remained stable at 3.0% (Sep: 3.0%).
In terms of unemployment duration, the share of unemployed for less than 3 months ticked down to 64.5% (Sep: 64.6%), while the share of unemployed for 3 to less than 6 months (20.5%; Sep: 20.4%) and more than a year (5.0%; Sep: 4.9%), edged higher.
Meanwhile, the share of unemployed for 6 to less than 12 months was unchanged at 10.1% (Sep: 10.1%). By category of unemployment, the number of unemployed persons who were actively seeking for jobs inched up to 413.8k persons (Sep: 413.6k).
Employment continued to rise at a steady pace on both YoY (+3.1%; Sep: +3.1%) and MoM basis (+0.2%; Sep: +0.2%), marking the fourth consecutive month of growth. The advance was led by the services sector, particularly within the accommodation, food & beverage services, wholesale & retail trade, as well as information & communication activities sub-sectors. Agriculture, manufacturing, and construction sectors posted further gains, while mining sector saw a contraction. In terms of employment status, the number of employees (+0.1% MoM; Sep: +0.1%) and own account workers (+0.4% MoM; Sep: +0.4%) recorded a steady growth. Meanwhile, the number of employed persons who were temporarily not working dropped to 80.3k persons (Sep: 82.9k persons).
The labour force expanded further consistently on both YoY (+2.8%; Sep: +2.8%) and MoM bases (+0.2%; Sep: +0.2%), reflecting continued optimism over the employment outlook. Following this, the labour force participation rate held steady at 70.9% (Sep: 70.9%).
Separately, SOCSO reported a marginal decline in loss of employment (LOE) cases to 6.9k in Nov (Oct: 7.0k). The bulk of the reported LOE came from the manufacturing, wholesale & retail trade as well as information & communication. KL (33.7%) and Selangor (24.8%) remained the two states with the highest LOE concentration.
In view of the latest data, HLIB expects Malaysia's labour market to remain broadly stable going into 2026, anchored by sustained global economic growth, resilient domestic demand, as well as policy-driven job creation and wage growth under various national master plans, including NIMP2030, NSS, NETR, and Budget 2026. While geopolitical and global policy uncertainties remain elevated, upside risks to growth have emerged, stemming from the US removal of export controls on advanced chips to China and other countries, as well as President Trump's indication of potential targeted tariff reductions.
Taking all these factors into account, the house maintains its expectation for BNM to keep the OPR unchanged at 2.75% throughout 2026.
