The latest data released on the labour market indicated that the unemployment rate remained at 3.7% for the second straight month in August. Unemployed person data fell for the thirteen-straight month, indicating a steady improvement in the labour market.
Consequently, the number of unemployed persons fell to 612.0k (Jul: 620.7k), slightly above pre-pandemic levels meanwhile employment expanded for the thirteen-straight month (0.2% MoM; Jul: 0.3%), bringing total employment to 16.02m person, a record high
Growth in labour force remained unchanged for the fourth straight month, with the total labour force expanding to a record high of 16.63m persons (Jul: 16.6m) and new job creation expanded from 39.3k to 42.1k. Labour force participation rate hit a record high since the data was made available in Jan 2015
The number of those outside the labour force fell for the thirteen-straight month to 7.24m, the lowest since March 2020, as more people sought jobs. This is also partly attributable to the availability of vacancies which is relatively high at 374.5k in July after it hit a record 508.0k in June.
On the back of this positive report, Kenanga is retaining its outlook, that the unemployment rate is expected to continue improving in the coming months attributable to the recovery in the services sector and a relatively robust private consumption as the nation moves towards endemicity and the increase in tourist arrivals.
Against this backdrop, the research house has revised its earlier 3Q22 GDP growth forecast to 10.9% from 8.8% and subsequently raise its full-year growth estimate to 6.5% – 7.0% (2021: 3.1%), matching the Ministry of Finance’s latest revised projection.
