Unemployment rate to improve to 3.9% in 2022

Unemployment rate to improve to 3.9% in 2022: Kenanga

Research house remains optimistic, but cautiously so due to potential Omicron threat

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KUALA LUMPUR – The country’s unemployment rate is forecast to improve to 3.9% in 2022, said Kenanga Research.

The research house said the recovery momentum is expected to gather pace in 2022 as the economy continues to chart an expansion bolstered by various ongoing support policies and robust external demand.

“Nonetheless, we reiterate our cautiously optimistic outlook on the labour market for 2022, largely due to the persistent downside risks associated with the Covid-19 new variant, which may undermine growth recovery,” it said in a note today.

Yesterday, the Statistics Department disclosed that unemployment in November 2021 fell below 700,000 persons for the first time since April 2020. The jobless rate remained at 4.3% for the second straight month.

Kenanga Research said the labour market is expected to continue to recover in December 2021 and reach an average figure of 4.6% for the whole year, in line with the broad reopening of the domestic economy underpinned by the progress of the Covid-19 vaccination campaign.

“The (number of) unemployed persons fell for the fourth straight month (in November 2021), reflecting continued recovery in the labour market and bringing the number of unemployed persons to 694,400 in November 2021 from 705,000 in October – the lowest since March 2020,” it said.

However, employment growth recorded a continued expansion of 0.4% month-on-month (m-o-m) in November from October (0.6%) albeit at a relatively slower pace in four months, it noted.

“The labour force expanded 0.2% (m-o-m) in November 2021 from 0.4% in October but at a slower rate, bringing the total labour force to a record high of 16.3 million from 16.26 million,” it said.

The research house said the labour force participation rate expanded for the fourth straight month to 69% in November 2021 from 68.8% in October 2021 – a record high mainly due to people returning to seek jobs as reflected in the lower number of those outside the labour force. – Bernama, January 11, 2022