Job market expected to strengthen further in 2023, 2024

It said the average unemployment rate is expected to decline further to 3.5 per cent in 2023 and return to pre-pandemic levels of 3.3 per cent in 2024.

"The return of non-citizen workers is expected to boost overall employment and reduce the jobless rate," it said in a note today.

As of the first quarter of 2023, non-citizens' employment was 4.4 per cent lower than the pre-pandemic level.

For the first half of 2023 (1H 2023), employment grew by 2.7 per cent year-on-year (y-o-y) compared with an expansion of 3.5 per cent y-o-y in 1H 2022, while unemployment eased by 10.4 per cent y-o-y (1H 2022: 14.8 per cent) with jobless rate averaging at 3.5 per cent.

Malaysia's unemployment rate hit a new post-pandemic low at 3.4 per cent in June 2023.

Labour force and employment expanded by 1.9 per cent y-o-y and 2.3 per cent y-o-y respectively in June, supported by upbeat domestic economic momentum.

"Continued improvement in the labour market will support consumer spending as the wage recipients to employment ratio reached a new peak of 64.5 per cent back in 2021, among others, thanks to the minimum wage salary policy," it noted.