Malaysia’s unemployment rate fell to 2.9% in December 2025 from 3.1% a year earlier, marking its lowest level since November 2014. The number of unemployed persons declined by 3.9% year-on-year to 517.7 thousand, the lowest in six years, while total employment increased by 3.0% to a new record high of 17.13 million. This lifted the employment rate to 68.9%, up from 68.4% a year earlier.
Employment in the services sector continued to expand steadily, led by wholesale and retail trade, followed by accommodation and food & beverage services, as well as information and communication activities. Meanwhile, the labour force participation rate edged up to 70.9%—matching its record high—from 70.6% in the same month of the previous year. Youth unemployment stood at 10.1%, remaining at its lowest level since January 2020.
Looking ahead, Malaysia’s labour market is expected to enter 2026 on a firmer footing, supported by a combination of fiscal measures, tourism recovery, and targeted employment initiatives.
