Kenanga Research has maintained its 2026 unemployment rate forecast at 2.9%, citing resilient hiring conditions, firm domestic demand and continued support from tourism and the global electrical and electronics upcycle.
Malaysia’s unemployment rate eased to 2.9% in August from 3.0% in July, with the number of unemployed persons falling 1.7% month-on-month to 511,600.
Actively unemployed persons, comprising those available and actively seeking work, declined 1.8% to 405,100, accounting for 79.2% of total unemployment.
Kenanga said employment growth also strengthened to 0.2% month-on-month, from 0.1% previously, pointing to continued resilience in the labour market.
Employees remained the largest employment category at 74.9% of total employment, followed by own-account workers at 18.8%, employers at 3.6% and unpaid family workers at 2.7%.
The labour force participation rate increased to a record 71.0%, from 70.9% in July, while the labour force expanded to 17.39 million persons.
Kenanga said labour market conditions remain supported by domestic economic activity, higher tourist arrivals under Visit Malaysia 2026 and the ongoing E&E cycle.
However, the research house flagged signs of some moderation in employment conditions based on Social Security Organisation (PERKESO) MYFutureJobs data.
Loss of Employment cases increased to 7,892 in September from 7,526 in August, while 3,276 cases had already been recorded as of Oct 8, suggesting a potentially higher monthly run rate if the pace persists.
At the same time, labour demand remained firm, with active job vacancies rising sharply to 539,193 at end-September, from 368,642 a month earlier.
Job placements slipped slightly to 25,708 from 26,468, indicating that not all vacancies were immediately translating into hires.
Despite the mixed signals, Kenanga said the high level of job openings should continue to underpin employment conditions.
Against this backdrop, the research house has also raised its 2026 GDP growth forecast to 5.3% from its previous projection, compared with growth of 5.2% in 2025, with domestic demand expected to remain the key driver of economic expansion.
