Unemployment to range up to 3.4% by end 2017

Workers Day rally. - Filepic

KUALA LUMPUR: AmBank Research expects the unemployment rate to stay around 3.3% to 3.4% by end-2017 from 3.5% in 2016. 

It said on Tuesday the better-than-expected GDP growth projected for 2017 at between 5.7% and 5.9% should still keep the net jobs created position on a positive trajectory. 

“The healthy 1H2017 GDP of 5.8% saw the net number of placed registrants standing at 1.644 million versus a net placement of -861,000 in 1H2016 and 1.108 million for the full year of 2016,” it said.  

To recap, AmResearch said July’s unemployment rate inched up marginally to 3.5% after staying at 3.4% for four consecutive months.

At the same time, the labour force participation rate, which is the ratio of labour force to the working population (15-64 years old), fell marginally to 67.7% in July from 67.8% in June. 

The slight gain in the unemployment rate was driven by three factors. First, there was a net drop in the number of jobs created in July, which is the first net decline for the year.
 
Net jobs created fell 22,500 in July following a net gain of 65,500 in June. Despite the decline, total net jobs created for the first seven months of the year stood at 220,700. 

Second, the net unemployed surged 11,300 in July from a mere 200 in June. 

Finally, those outside the labour force i.e. housewives, students (including those going for further studies), retirees, disabled persons and those not interested in looking for a job rose 2.0% on-year to 7.15 million in July. This segment makes up 32.5% of the labour force. 

“We suspect there could be an increase in the number of students and also those venturing into informal micro businesses,” AmResearch said.