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- Unemployment remained at 2.9% in January 2026, with 509,600 unemployed persons.
- The labour force rose to 17.28mn, with participation increasing to 70.9%.
- Employment increased slightly to 16.77mn, led by growth in the services sector.
Malaysia’s labour market remained stable in January 2026, with the unemployment rate holding at 2.9%, according to the latest Statistics of the Labour Force released by the Department of Statistics Malaysia (DOSM).
Commenting on the performance for the month, Dato’ Sri Dr Mohd Uzir Mahidin, Chief Statistician Malaysia said the labour market continued expanding in line with favourable economic growth.
He noted that the labour force maintained its positive momentum, increasing 0.1% month-on-month to 17.28mn persons, compared with 17.27mn persons in December 2025.
At the same time, the labour force participation rate increased slightly by 0.1 percentage points to 70.9%, up from 70.8% in the previous month, indicating more participation in the labour market.
Increase in employment
The number of employed persons also continued to increase during the month, although at a modest pace. Employment rose 0.04% to 16.77mn persons, slightly higher than the 16.76mn recorded in December 2025.
Of the total employed population, 75.1% were in the employees’ category, which remained the largest group in the labour market. The number of employees increased marginally 0.03% to 12.59mn persons, compared with 12.58mn in December.
Meanwhile, the number of own-account workers grew 0.1% to 3.13mn persons, an increase from 3.12mn persons in the previous month.
Services sector continues to drive job growth
Across industries, the services sector continued to record increases in the number of employed persons during January.
The growth was largely seen in:
- Wholesale and retail trade
- Accommodation and food and beverage services
- Transportation and storage activities
Employment also recorded positive growth in the agriculture, manufacturing, construction, and mining and quarrying sectors.
Slight increase in unemployment and underemployment
While employment increased, the number of unemployed persons also saw a slight rise.
Unemployment increased 0.3% to record 509,600 persons, compared with 508,000 persons in December 2025. Despite the increase, the unemployment rate remained unchanged at 2.9%.
The number of people working less than 30 hours per week rose 0.8% to 242,700 persons, an increase from 240,900 persons in the previous month.
Similarly, time-related underemployment, which refers to individuals working fewer than 30 hours per week but willing and available to work additional hours, increased 1.0% to 133,500 persons, compared with 132,100 persons in December.
However, the time-related underemployment rate remained unchanged at 0.8%.
Most unemployed actively seeking jobs
Among the unemployed, the majority were actively looking for work.
According to DOSM, 79.8% of the unemployed were actively unemployed, meaning they were available for work and actively seeking jobs. This group increased 0.3% to 406,900 persons, compared with 405,500 persons in December.
In terms of unemployment duration among this group:
- 63.8% had been unemployed for less than three months, while
- 5.1% had been unemployed for more than a year, indicating long-term unemployment.
Meanwhile, the number of inactively unemployed persons, referring to those who believed there were no jobs available, increased 0.3% to 102,800 persons, compared with 102,400 persons in the previous month.
Youth unemployment improves slightly
Youth unemployment recorded a slight improvement during the month.
The unemployment rate for youths aged 15 to 24 years declined 0.1 percentage points to 10.2%, representing 289,700 unemployed youths, compared with 291,900 persons in December.
For youths aged 15 to 30 years, the unemployment rate stood at 6.2%, with 390,500 unemployed youths, slightly lower than 390,700 persons recorded in the previous month.
Fewer people outside the labour force
The number of persons outside the labour force decreased 0.4% to 7.11mn persons, compared with 7.13mn persons in December 2025.
Among those outside the labour force, 43.3% were engaged in housework or family responsibilities, while 40.4% were involved in schooling or training.
Labour market expected to remain stable
Looking ahead, Malaysia’s labour market is expected to remain favourable, with stable labour force participation and continued recovery in the services, tourism and technology export sectors.
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Lead image / DOSM
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