PETALING JAYA: The unemployment rate improved to 4.9% in June, a 0.4% month-on-month (mom) decline from 5.3% reported in the previous month as the number of unemployed persons lessened by 52,900 or a 6.4% drop year-on-year to 773,200 persons, according figures by the Department of Statistics Malaysia.
Chief statistician Datuk Seri Mohd Uzir Mahidin attributed the drop in unemployment to the improvement in labour supply situation which is in line with the reopening of more economic sectors including education, social and religious activities following the recovery movement control order (MCO).
For the month, the number of employed persons grew by 0.7% mom from a decline of 0.3% 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,” he said in a statement today.
“Among others, employed persons rose within the e-commerce activity, delivery services and information and communication technology related activities.”
The department observed that the number of employed persons working less than 30 hours per week decreased by 35.5% to 470,100 persons as compared to 729,100 persons in May 2020.
It also noted that the number of employed persons who were temporarily not working due to MCO has reduced more than 65% to 768,000 persons compared to 2.27 million persons recorded in May.
The department elaborated that 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.
Meanwhile, it reported that own-account workers stood at 2.42 million persons in June, which continued the decline that started in March this year, although the monthly change was very much lower than the change registered during the previous period.
June 2020, saw the total labour force increased by 49,500 persons month-on-month to record 15.76 million persons, while the labour force participation rate (LFPR) for the month stood at 68.1%, registering an increase of 0.1 percentage point month-on-month.
Likewise, employment-to-population ratio which provides information on the ability of an economy to create employment improved 0.3 percentage points to 64.7% as compared to the previous month.
Outside labour force in June saw a marginal inflows of 0.1% which brought the total sum to 7.4 million persons.
On a quarterly basis, Uzir stated that the unemployment rate rose to 5.1% in the second quarter compared to 3.5% reported for the first quarter of the year.
“During this quarter, labour utilisation was yet to resume at optimum level as businesses had only begun to regain their momentum. Thus, the employed persons decreased 2.4 per cent to 14.88 million persons largely in semi-skilled and low-skilled occupation,” he said.
In terms of status in employment, the chief statistician pointed out that all categories namely employers, employees, own-account workers and unpaid family workers recorded a decline as compared to the previous quarter.
LFPR in this quarter dropped 0.1 percentage point to 68.1% with both male and female posted lower LFPR at 55.0 per cent and 80.2% respectively.
In regards to the overall labour force condition, he expects the situation to grow and improve in July as the initial stage of recovery kicked off, coupled with short term stimulus packages by the government and a more promising situation is expected in the second half of 2020.
“The Penjana initiatives also offered the opportunities for entrepreneurs in digitalising their business operations. With higher adoption of technology, as well as focus in digital skills, creation of more skilled jobs can be accelerated towards higher productivity,” said Uzir.
