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More Malaysians found work in September 2025 as total employment reached 17.03mn, supported by steady gains across services, manufacturing, and construction sectors.
The number of unemployed persons in Malaysia decreased further to 518,600 in September 2025, recording an unemployment rate of 3.0%, according to the Department of Statistics Malaysia (DOSM). These findings were published in the Statistics of the Labour Force, Malaysia, September and Third Quarter 2025 report, which draws insights from the Labour Force Survey.
Dato’ Sri Dr Mohd Uzir Mahidin, Chief Statistician Malaysia commented: "The encouraging economic performance has helped strengthen Malaysia’s labour force in September 2025, with an increase in the number of employed persons, a reduction in unemployment, and the expansion of inclusive regional development."
Labour force and participation remain stable
In September 2025, the labour force expanded by 0.2% to 17.54mn persons, up from 17.51mn in August 2025. The labour force participation rate (LFPR) stayed at 70.9%, unchanged from the previous month.
The number of employed persons also rose by 0.2% to 17.03mn, compared to 16.99mn in August. At the same time, the number of unemployed fell by 0.3% to 518,600 persons from 520,000 in August. The unemployment rate held steady at 3.0%.
Employment composition and sectoral trends
Employees made up the majority of the employed group, accounting for 74.9% or 12.74mn persons, an increase from 12.73mn in August. The number of own-account workers, including small business owners and freelancers, also rose by 0.4% to 3.24mn persons from 3.22mn in August.
By sector, the services industry continued to post steady gains in September, led by wholesale and retail trade, accommodation and food services, as well as information and communication activities. The manufacturing, construction, mining & quarrying, as well as agriculture sectors also recorded increases in employment.
Active job seekers make up nearly 80% of the unemployed
Among the unemployed, 79.8% were actively seeking work, representing 413,600 persons, a decline of 0.3% from August. Within this group, 64.6% had been unemployed for less than three months, while 4.9% were in long-term unemployment lasting more than a year.
The number of inactively unemployed persons, or those who believed there were no jobs available, declined by 0.2% to stand at 104,900, down from 105,100 in August.
Youth unemployment improves
The youth unemployment rate for those aged 15 to 24 years fell slightly by 0.1 percentage points (p.p.) to 10.1%, representing 296,900 persons compared to 298,000 in August. For youths aged 15 to 30 years, the unemployment rate was unchanged at 6.2%, with 398,100 unemployed persons recorded.
Slight rise in those outside the labour force
The number of persons outside the labour force increased marginally by 0.1% to 7.21mn persons compared to 7.20mn in August. Housework and family responsibilities made up the largest share of this group at 43.6%, followed by those in schooling or training at 40.8%.
Third quarter 2025: Labour market shows steady progress
For the third quarter of 2025, Malaysia’s labour force expanded by 0.7% to 17.49mn persons from 17.37mn in the previous quarter. The LFPR increased by 0.1p.p. to 70.9%.
Following this trend, the number of employed persons rose by 0.7% to 16.97mn from 16.85mn in the second quarter. The number of unemployed persons declined by 0.2% to 519,900 compared to 520,900 in the previous quarter. The unemployment rate for the third quarter remained at 3.0%.
Underemployment trends
The number of persons working less than 30 hours per week decreased by 4.2% to 230,900 during the quarter, compared to 241,000 in the previous quarter. Similarly, those classified as time-related underemployed, meaning they worked less than 30 hours but were willing and able to work additional hours, declined by 5.5% to 133,300, maintaining an underemployment rate of 0.8%.
Skill-related underemployment, which includes individuals with tertiary qualifications working in semi-skilled or low-skilled jobs, increased slightly by 0.3% to 1.96mn persons. The skill-related underemployment rate stood at 35.5%, similar to 35.6% in the previous quarter.
State-level comparisons
At the state level, Putrajaya registered the lowest unemployment rate at 1.4%, followed by Pahang at 1.7% and Selangor at 1.8%. Nine states reported an increase in the LFPR, with Selangor recording the highest rate at 78.2%, followed by Putrajaya at 77.8% and W.P. Kuala Lumpur at 75.6%.
Positive outlook for 2026
According to DOSM, Malaysia’s labour market is recording its best performance in over a decade. The outlook for 2026 remains positive, supported by ongoing efforts in human capital development, entrepreneurship, and growth in strategic sectors such as the halal industry and digital technology.
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Lead image / DOSM
Infographic /DOSM Facebook
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