Steady hiring momentum keeps Malaysia’s jobless rate at 3% in June 2025

Employment grew 0.3% month-on-month to 16.92mn in June, with services leading the way. DOSM projects continued stability ahead, backed by strong domestic demand and strategic investments.

Malaysia’s labour market maintained its stability in June 2025, with unemployment holding at 3% for the third straight month and job gains recorded across services, manufacturing, construction, and agriculture. The total labour force expanded to 17.43mn, driven by steady demand for workers and rising participation rates, according to the Department of Statistics Malaysia's Principal Statistics of Labour Force, Second Quarter 2025.

Employees remained the largest share of the workforce, accounting for 75% (12.69mn persons), while own-account workers rose 0.6% to 3.20mn persons. Gains were recorded across all major sectors, with services — particularly wholesale & retail trade, accommodation & F\&B, and information & communication — leading the increase. Manufacturing, construction, mining & quarrying, and agriculture also saw employment growth.

Of the total unemployed, 79.9% were actively seeking work, with 64.5% unemployed for less than three months and 5% unemployed for over a year. The number of inactively unemployed, citing no available jobs, fell 1.6% to 104,300 persons.

Youth unemployment for those aged 15–24 held at 10.2% (297,500 youths), while among 15-30-year-olds, the rate was 6.2% (396,800 youths).

The number of people outside the labour force stood at 7.18mn, down marginally from May. The main reasons remained housework/family responsibilities (43.7%) and schooling/training (40.9%).

Q2 2025 snapshot:

Across the second quarter, the labour force rose 0.8% month-on-month to record 17.37mn persons, with the labour force participation rate (LFPR) ticking up to 70.8%. Employment grew 0.9% to record 16.85mn persons, while unemployment fell 1% to record 520,900 persons, thus resulting in a 1% decline in the unemployment rate (Q1: 3.1%; Q2: 3%).

Per the findings, while time-related underemployment declined to 0.8%, skill-related underemployment — those with tertiary education in semi- or low-skilled roles — edged up to 1.96mn persons in Q2 (35.6%).

At the state level, Putrajaya recorded the lowest unemployment rate (1.4%), followed by Pahang (1.8%) and Selangor (1.9%). Selangor also had the highest LFPR, which stood at 78%).

Looking ahead, DOSM said it expects labour market stability to continue, supported by domestic demand, productivity gains, job creation, and investment — particularly in technology and strategic sectors. However, challenges such as talent migration, global trade tensions, and inflation remain on the horizon.