Malaysia Records Lowest Unemployment Since 2014, But Youth Joblessness Remains High

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Malaysia's unemployment rate fell to 2.9% in the first quarter of 2026, marking the country's lowest jobless level since the second quarter of 2014

According to the latest Labour Force Survey Report released by the Department of Statistics Malaysia (DOSM) on 12 May, the number of unemployed persons stood at 506,500 in Q1 2026.

The figure was down by 0.4% compared to the 508,300 unemployed persons recorded in Q4 2025. On a yearly basis, unemployment also improved by 3.1%, or roughly 16,100 people, from 522,500 in Q1 2025.

DOSM described Malaysia's labour market as remaining "stable" during the quarter.

It said the labour market continued to be supported by stable performances across the services, manufacturing, construction, and agriculture sectors.

However, the mining and quarrying sector recorded a decline during the same period.

Most unemployed Malaysians are actively looking for jobs

Of the 506,500 unemployed persons recorded in Q1 2026, 79.8%, or 404,000 individuals, were categorised as actively unemployed, meaning they were available for work and actively searching for employment.

Meanwhile, 20.2%, or 102,500 people, were classified as inactively unemployed.

According to DOSM, this group includes individuals who did not seek work because they believed no jobs were available or felt they were unqualified for available positions.

The report also showed that most job seekers were unemployed for relatively short periods.

Among actively unemployed persons:

• 67.1% were unemployed for less than three months
• 20.2% were unemployed for between three and six months
• 9.1% were unemployed for between six and 12 months
• 3.6% remained unemployed for more than a year

Youth unemployment in Malaysia remains significantly higher than that of adults

Despite the broader improvement in Malaysia's labour market, unemployment among youths aged 15 to 24 remained substantially higher than the national average.

DOSM defines the working age population as all persons aged 15 to 64 years. This is based on international standards to measure the total pool of people who are physically capable of participating in the economy, whether they choose to work, look for work, or stay in school.

DOSM reported that the youth unemployment rate stood at 9.8% in Q1 2026.

The total number of unemployed youths also increased slightly to 279,900 persons, up from 278,200 in the previous quarter.

In comparison, the unemployment rate among adults aged 25 to 64 was much lower at 1.6%, involving 226,500 people.

The figures highlight a continuing gap between younger Malaysians entering the workforce and older, more established workers.