Unemployment rate goes down as labour force shows slight improvement in June 2020

PUTRAJAYA (Bernama): Malaysia’s unemployment rate has declined by 0.4 percentage points month-on-month in June 2020 to 4.9 per cent from a record-high of 5.3 per cent in May 2020, the Department of Statistics Malaysia (DOSM) reported Friday (Aug 7) on Statistics of Labour Force, Malaysia, June 2020.

Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said the number of unemployed people lessened by 52,900 to 773,200 during the month, hence showing a slight improvement in Malaysia’s labour force situation as more economic sectors reopened following the recovery movement control order (MCO) phase.

"The improvement in labour supply situation during the month was in line with the reopening of more economic sectors including education, social and religious activities following the recovery MCO.

"During the month, the number of employed persons grew marginally by 0.7 per cent month-on-month from -0.3 per cent in May 2020 to record 14.99 million persons.

"The increase was apparent in the services sector, as it observed its first month-on-month positive growth since January 2020. Among others, employed persons rose within the e-commerce activity, delivery services and information and communication technology-related activities,” he said in a statement.

Uzir said it was also observed that the number of employed persons working less than 30 hours per week had decreased by 35.5 per cent to 470,100 as compared to 729,100 persons in May 2020.

In the meantime, he said the number of employed people who were temporarily not working due to the MCO had declined by more than 65 per cent to 768,000 from 2.27 million in May.

"This group of people, who were most likely not able to work from home was not categorised as unemployed as they had work to return to,” he said.

In line with this, he said the total labour force in June 2020 had increased by 49,500 persons month-on-month to 15.76 million.

"The labour force participation rate (LFPR) in June 2020 stood at 68.1 per cent, registering an increase of 0.1 percentage point month-on-month.

"Likewise, the employment-to-population ratio, which provides information on the ability of an economy to create employment, improved 0.3 percentage points to post 64.7 per cent as compared to the previous month,” he said.

While elaborating on the Labour Force Survey Report, Malaysia, Second Quarter 2020, Uzir said: "The unemployment rate in this quarter increased to 5.1 per cent as compared to 3.5 per cent in the first quarter of 2020, led by the sharp increase in the unemployment rate in May 2020. During this quarter, labour utilisation was yet to resume at an optimum level as businesses had only begun to regain their momentum.

"Thus, the employed persons decreased by 2.4 per cent to 14.88 million largely in semi-skilled and low-skilled occupation,” he said.

In terms of status in employment, he said all categories namely employers, employees, own-account workers and unpaid family workers recorded a decline as compared to the previous quarter.

Uzir said as the initial stage of recovery kicked off, coupled with short term stimulus packages by the government, the labour force situation in July 2020 is expected to grow and improve.

"A more promising situation is foreseen in the second half of 2020," he said.- Bernama