Female labour force participation rate hits record high of 56.6% in Q4 2025

• Malaysia’s unemployment rate eased to 2.9% in Q4 2025, with the number of unemployed persons falling to 517,700.
• Employment edged up to 17.13mn, while the labour force expanded by 0.2% to 17.65mn.
• States like Putrajaya, Pahang, and Selangor posted the lowest unemployment, while female participation exceeded targets in selected urban areas.

Malaysia's unemployment rate fell to 2.9% in Q4 2025, said the Department of Statistics Malaysia (DOSM) in its latest Labour Force Statistics report for December and Q4 2025.

Elaborating on the overall performance in the fourth quarter of 2025, Malaysia's Chief Statistician Dato’ Sri Dr. Mohd Uzir Mahidin said: “Malaysia’s labour market in December 2025 continued to demonstrate positive growth, underpinned by sustained economic improvements."

He shared that the number of employed persons posted a marginal increase, while unemployment further declined. Therefore, the labour force was on an uptrend, increasing by 0.2% to 17.65mn persons (November 2025: 17.61mn persons). On the same note, the labour force participation rate (LFPR) during the month remained unchanged at 70.9% as in the previous month."

Here is a breakdown of the report according to employment, unemployment, labour force, and outside labour force.

Employment

Employment continued to inch up in December 2025, rising 0.2% month-on-month to 17.13mn persons from 17.09mn in November. At the same time, unemployment eased slightly, with the number of unemployed dipping 0.1% to 517,700 persons (November: 518,400). The unemployment rate held steady at 2.9%, unchanged from the previous month.

The Chief Statistician Malaysia also added that employees made up the bulk of the workforce at 74.7% of total employment, with this group growing 0.1% to 12.80mn persons from 12.78mn. Own-account workers also edged higher, up 0.4% to 3.27mn.

By industry, employment gains were led by the services sector, particularly wholesale & retail trade, accommodation and food & beverage services, and information & communication. Hiring also picked up across agriculture, manufacturing and construction, while mining & quarrying saw a slight pullback.

Unemployment

A closer look at December 2025 shows that 79.7% of unemployed persons were actively seeking work and available to start. This group declined 0.3% month-on-month to 412,400 persons, down from 413,500 in November. Among the actively unemployed, nearly two-thirds (64.6%) had been out of work for less than three months, while 4.9% were classified as long-term unemployed for over a year.

Meanwhile, the number of those considered inactively unemployed — individuals who believed no jobs were available — edged up 0.3% to 105,200 persons, compared with 104,900 the month before.

Youth unemployment remained largely unchanged. For those aged 15 to 24, the rate held at 10.1%, with 298,700 unemployed youths (November: 297,900). Among youths aged 15 to 30, the unemployment rate stood at 6.1%, translating to 396,900 persons, slightly lower than 398,000 previously.

Labour force 

Looking at state-level data for the fourth quarter of 2025, W.P. Putrajaya and Pahang recorded the lowest unemployment rates at 1.6%, followed by Selangor at 1.8%, while Johor and Melaka both stood at 2.5%.

Nine states saw increases in LFPR, with Selangor leading at 78.5%, followed by W.P. Putrajaya (78.2%) and W.P. Kuala Lumpur (75.5%). Female LFPR exceeded the 2025 target under the 12th Malaysia Plan in three states: W.P. Putrajaya at 77.5%, Selangor at 69.0%, and W.P. Kuala Lumpur at 66.0%. At the lower end, the states with the lowest female participation were Terengganu (42.7%), Kelantan (45.8%), and Pahang (47.4%).

Outside the labour force 

The number of persons outside the labour force in December 2025 edged up slightly by 0.1% to 7.23mn, compared with 7.22mn in November. Most were occupied with housework or family responsibilities (43.7%), while schooling or training accounted for the second-largest group at 40.9%.

According to the Chief Statistician, those working less than 30 hours per week fell 0.6% to 229,500 persons in Q4 2025 (Q3: 230,900). Among them, individuals willing and able to work additional hours — classified as time-related underemployment — dropped 2.6% to 129,800, keeping the time-related underemployment rate at 0.8% (Q3: 133,300; 0.8%). Skill-related underemployment, referring to people with tertiary education working in semi-skilled or low-skilled jobs, edged down 0.3% to 1.96mn persons, with a rate of 35.3% (Q3: 1.96mn; 35.5%).

Looking ahead, the Chief Statistician noted that Malaysia’s labour market is expected to enter 2026 on a stronger footing, supported by a mix of fiscal, tourism, and employment initiatives. The Budget 2026 under Ekonomi MADANI highlights labour market reforms, efforts to boost employability and wages, and collaboration with industry on skills development.

"These measures are expected to foster a resilient workforce and help boost participation in both formal and emerging economic sectors," he added.

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Lead image and infographics / DOSM