Malaysia's unemployment rate stands at 3.9 pct in May

People wearing face masks walk in front of the Petronas Twin Towers in Kuala Lumpur, Malaysia, Jan. 29, 2021. (File photo: Xinhua)

KUALA LUMPUR, July 7 (Xinhua) -- The number of unemployed people in Malaysia fell 1.8 percent to 637,700 in May from the previous month, recording an unemployment rate of 3.9 percent, official data showed Thursday.

The recovery of the labor market in May continued to be stable, aligned with the full operation of all economic activities, the Department of Statistics Malaysia (DOSM) said in a statement.

"These encouraging economic activities during the month stimulated more demand for goods and services, thus providing more opportunities for businesses to revive their revenues," it said.

The labor market is also observed to expand as more demand and supply of labor prevails in the market to accommodate the needs of the growing economic activities.

Thus, the labor force situation during the month remained resilient as the number of labor forces reached 16.54 million with a month-on-month increase of 0.2 percent.

Subsequently, the labor force participation rate in May increased marginally to 69.5 percent from 69.4 percent in April.

Meanwhile, the number of employed people rose further in May by 0.3 percent to a record 15.90 million from the previous month.

Looking at the employed persons by economic sector, the services sector continued to record positive growth in employment largely in wholesales and retail trade, information and communication, and food and beverage services activities.

Going forward, the DOSM said the crisis of rising prices of commodities prevailing in the market had indirectly impacted Malaysia's economic development, which will result in inflation and affect the country's economic recovery.

However, the operation of all economic sectors and social activities is observed as a contributing factor to the increase in demand for labor.

In addition, the entry of foreign labor into the country to cope with labor shortages in certain industries is also foreseen as a positive element in ensuring a stable labor market even though it will lead to higher competition and a tight labor market.

"Thus, the labor market is anticipated to be in a positive recovery momentum in the upcoming months, but does not consider the impending effects of the inflationary pressure globally," it said.