Unemployment in Malaysia rose to 520,300 in July 2026

This was an increase from 517,800 in June. That said, continued labour force growth kept the unemployment rate unchanged at 3%.

Malaysia’s labour force expanded slightly in July 2026, while the unemployment rate remained unchanged at 3.0% despite a small increase in the number of people without work.

The Department of Statistics Malaysia (DOSM) reported that 17.37mn people were in the labour force in July, up 0.1% from 17.34mn in June. The labour force participation rate (LFPR) which measures the share of the working-age population that is either employed or actively seeking work, was steady at 70.9%.

Employment continues to edge up

The number of employed people rose marginally to 16.85mn in July, compared with 16.83mn a month earlier. The employment-to-population ratio was unchanged at 68.8%.

The services sector remained the main contributor to employment growth, supported by gains in:

• Arts,
• Entertainment and recreation,
• Accommodation and food and beverage services, as well as
• Financial and insurance or takaful activities.

Employment also increased across agriculture, mining and quarrying, manufacturing, and construction.

Employees continued to make up the largest share of those in work, accounting for 74.9% of total employment. Their numbers rose by 0.1% to 12.62mn.

Own-account workers, including self-employed individuals and small business operators, increased by 0.3% to 3.16mn. Employers and unpaid family workers also recorded slight gains.

Unemployment rises slightly, but rate stays unchanged

The number of unemployed people rose by 0.5% to 520,300 in July, from 517,800 in June. However, the unemployment rate remained at 3.0%, reflecting continued growth in the overall labour force.

Of the total unemployed, 79.3% (412,600 people) were actively looking for work and available to take up jobs. This was a 0.4% increase from 410,900 in June.

Among active jobseekers, nearly two-thirds, or 63.5%, had been unemployed for fewer than three months. Meanwhile, 5.4% had been unemployed for more than a year.

The remaining 20.7% of unemployed people were classified as inactive jobseekers. This group includes people who are available for work but are not actively seeking jobs, including those who believe no suitable jobs are available. Their number rose by 0.7% to 107,700.

Youth joblessness remains a concern

Unemployment among younger Malaysians continued to be significantly higher than the national average.

For those aged 15 to 24, the unemployment rate remained at 10.2%, with 292,500 unemployed people recorded in July. For the broader 15-to-30 age group, the unemployment rate rose slightly to 6.4%, involving 404,500 people, compared with 6.3% or 400,800 people in June.

Outside the labour force

The number of people outside the labour force stood at 7.11mn in July, broadly unchanged from the previous month.

Housework and family responsibilities remained the largest reason for being outside the labour force, accounting for 43.3% of the total. Schooling and training made up another 40.2%.

A stable market, with longer-term challenges

Overall, Malaysia's labour market remained stable in July 2026, supported by continued employment growth and a low unemployment rate. However, DOSM noted that structural economic shifts and technological advances underline the need to strengthen skills and human capital development to ensure that "the nation's workforce remains competitive and capable of meeting future labour market demands." 

READ MORE: Labour productivity in Malaysia rose 5.5% to RM46.5 per hour in Q2 2026: DOSM

Infographics / DOSM