PETALING JAYA: The labour market remained stable at the start of 2026, with TA Research highlighting that underlying conditions continue to support employment growth despite signs of a mild moderation in hiring momentum.
The research house said trend-wise, hiring slowed during the month, likely reflecting high base effects following strong employment gains throughout last year, as well as seasonal normalisation after year-end hiring in sectors such as retail, tourism and services.
In January 2026, Malaysia’s labour force rose 0.4% year-on-year and 0.1% month-on-month to 17.28 million persons, while employment increased 0.5% year-on-year to 16.77 million.
Unemployment stayed at 2.9%, with 509,600 unemployed persons recorded during the month, indicating that labour market conditions remained broadly resilient.
TA Research noted that despite marginal employment growth of 0.5% year-on-year, the labour market remains broadly stable.
The brokerage said the slight month-on-month rise in unemployment, up 0.3% from December’s 507,900 persons, likely reflected short-term adjustments after temporary festive-season jobs ended.
According to TA Research, “the month-on-month increase in unemployment may partly reflect short-term adjustments at the start of the year, as some temporary workers hired during the year-end festive period exit the workforce”.
Employment gains remained broad-based across major sectors. Services continued to lead hiring, particularly in wholesale and retail trade, accommodation, food and beverage services, and transportation and storage.
Agriculture, manufacturing, construction and mining also recorded employment growth. Employees made up 75.1% of total employment, with 12.59 million workers, while own-account workers rose to 3.13 million. TA Research projected the unemployment rate to improve further to an average of 2.8% in 2026, aided by stronger private investment and structural reforms.
Hong Leong Investment Bank (HLIB) Research similarly described January’s labour data as showing continued steady improvement. It noted that employment rebounded marginally by 0.04% month-on-month after December’s sharper contraction, supported by broad-based expansion across all sectors.
The labour force also recovered by 0.1% month-on-month, while the unemployment rate remained unchanged at 2.9%.
HLIB Research said the January release underscored a sustained positive trajectory in the job market. It also pointed out that although December figures for labour force and employment were revised lower, a corresponding downward adjustment in unemployed persons helped keep the unemployment rate stable.
