Malaysia unemployment rises to 520,300 in July as jobless rate holds at 3%

Malaysia’s number of unemployed people rose to 520,300 in July 2026 from 517,800 in June, while the country’s unemployment rate remained unchanged at 3.0%, according to the Department of Statistics Malaysia (DOSM).

The increase in unemployment came alongside continued growth in the labour force. The number of people in Malaysia’s labour force rose 0.1% month-on-month to 17.37 million in July, from 17.34 million in June. The labour force participation rate (LFPR) remained at 70.9%.

Employment also edged higher during the month, with the number of employed people increasing to 16.85 million from 16.83 million in June. The employment-to-population ratio was unchanged at 68.8%.

Services sector drives employment growth

The services sector remained the main contributor to employment growth in July, with gains recorded in arts, entertainment and recreation; accommodation and food and beverage services; and financial, insurance and takaful activities.

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

Employees continued to account for the largest share of Malaysia’s employed population, representing 74.9% of total employment. Their number increased 0.1% to 12.62 million.

The number of own-account workers, including self-employed people and small business operators, rose 0.3% to 3.16 million. Employers and unpaid family workers also recorded marginal increases.

Active jobseekers make up majority of unemployed

Of the 520,300 unemployed people recorded in July, 79.3%, or 412,600, were actively seeking work and available to take up employment. This was an increase from 410,900 in June.

Among active jobseekers, 63.5% had been unemployed for less than three months, while 5.4% had been without work for more than a year.

The remaining 20.7%, or 107,700 people, were classified as inactive jobseekers. This includes people who are available for work but are not actively looking for jobs, including those who believe suitable employment is unavailable. The number of inactive jobseekers rose 0.7% during the month.

Youth unemployment remains elevated

Youth unemployment continued to exceed the national rate. Among Malaysians aged 15 to 24, the unemployment rate stood at 10.2% in July, with 292,500 young people unemployed.

For the broader 15-to-30 age group, unemployment edged up to 6.4%, involving 404,500 people, compared with 6.3% and 400,800 people in June.

Meanwhile, the number of people outside the labour force was broadly unchanged at 7.11 million.

Household and family responsibilities remained the largest reason for being outside the labour force, accounting for 43.3% of the total. Schooling and training accounted for a further 40.2%.

While Malaysia’s labour market remained broadly stable in July, DOSM highlighted the need to strengthen skills and human capital development as structural economic changes and technological advances reshape workforce requirements.

The department said strengthening these capabilities will be important to ensure Malaysia’s workforce remains competitive and able to meet future labour market demands.