Putrajaya records lowest state-level unemployment rate in Malaysia in Q2 2026

The state's rate stood at 1.3%, with Melaka and Pahang coming close behind at 2.0% each.

Malaysia’s unemployment rate rose slightly to 3.0% in Q2 2026, up from 2.9% in Q1, as the number of unemployed people increased to 509,700.

As a whole, the labour force grew by 0.3% to 17.28mn, while employment rose by 0.2% to 16.77mn, according to the Department of Statistics Malaysia (DOSM).

By state and territory, Putrajaya recorded the lowest state-level unemployment rate in the second quarter at 1.3%, followed by Melaka and Pahang at 2.0% each, and Selangor at 2.1%.

Putrajaya also recorded the highest labour force participation rate (LFPR) in the country at 79.4%, above the national rate of 70.9%. This was followed by Selangor at 77.9% and Kuala Lumpur at 76.0%, according to DOSM.

The figures show that Putrajaya had both the lowest unemployment rate and the highest share of working-age people who were either employed or actively seeking work during the quarter.

Labour market performance in June 2026

Looking at June, the unemployment rate remained at 3.0% in the month, unchanged from the previous month, as the country’s labour market continued to show steady growth.

According to the Department of Statistics Malaysia (DOSM), the number of unemployed people increased by 0.9% month-on-month (m-o-m) to 517,800 in June, up from 513,400 in May.

At the same time, employment edged up slightly. The number of people in work rose by 0.01% to 16.83mn, while the overall labour force increased marginally to 17.34mn people.

The labour force participation rate (LFPR), which measures the share of working-age people who are employed or actively looking for work, also remained unchanged at 70.9%.

According to DOSM, the figures point to continued resilience in the labour market, supported by Malaysia’s economic performance. Employment growth was led by the services sector, particularly transportation and storage, accommodation and food services, and wholesale and retail trade. Manufacturing and construction also recorded gains, while employment declined in agriculture and mining & quarrying.

Employees continued to make up the largest share of those in work, accounting for 75% of total employment (12.61mn people). The number of own-account workers also rose slightly to 3.15mn.

Of the 517,800 people unemployed in June, 410,900 (79.4%) were actively seeking work and available to start. Nearly two-thirds of this group had been unemployed for less than three months, while 5.3% had been out of work for more than a year.

Meanwhile, youth unemployment remained markedly higher than the national rate. Among people aged 15 to 24, the unemployment rate stood at 10.2%, with 292,200 unemployed young people recorded. For those aged 15 to 30, the rate remained unchanged at 6.3%.

Looking ahead, DOSM stated that the labour market is expected to remain positive, backed by stable domestic conditions and ongoing investment. However, it warned that uncertainty in global energy markets, geopolitical tensions and external trade conditions could still affect business costs and hiring decisions.

READ MORE: Malaysia’s economy saw 5.8% growth in Q2 2026

Lead image / DOSM