Malaysia’s labour market continued to expand in the second quarter of 2026, with the number of employed persons rising by 40,500 to 16.77 million, according to the Department of Statistics Malaysia (DOSM).
The latest figures showed employment grew 0.2% quarter-on-quarter from 16.73 million persons in the first quarter. On a year-on-year basis, the number of employed persons increased by 1.1%, or 179,200 persons, from 16.59 million in Q2 2025.
However, the number of unemployed persons also increased during the quarter, rising 0.6% to 509,700 persons from 506,500 in Q1 2026.
As a result, Malaysia’s unemployment rate edged up 0.1 percentage point to 3.0%, compared with 2.9% in the preceding quarter.
Despite the quarterly increase, the labour market remained stronger compared with a year earlier. The number of unemployed persons declined by 1.6%, or 8,100 persons, from 517,800 in Q2 2025, while the unemployment rate remained unchanged at 3.0%.
The Labour Force Participation Rate (LFPR) remained stable at 70.9% in Q2 2026, unchanged from the previous quarter.
At the state level, five states and federal territories recorded LFPRs above the national rate.
Putrajaya registered the highest LFPR at 79.4%, followed by Selangor at 77.9% and Kuala Lumpur at 76.0%.
The high participation rates in these areas reflect their concentration of employment opportunities and economic activity, particularly in the services and administrative sectors.
Meanwhile, nine states recorded unemployment rates below the national level of 3.0%.
Putrajaya again recorded the lowest unemployment rate at just 1.3%, followed by Melaka and Pahang at 2.0% each, while Selangor recorded an unemployment rate of 2.1%.
The latest figures point to a labour market that remains relatively resilient, with continued employment creation offsetting the gradual increase in the number of people seeking work.
The steady LFPR also suggests that participation in the labour market remained broadly stable despite ongoing changes in domestic economic conditions.
The Q2 performance comes as Malaysia’s economy continues to benefit from growth in key sectors, particularly services, manufacturing and construction, supporting demand for workers and helping sustain overall employment momentum.
