October unemployment rate continued to stay at the 3.4% level for the third consecutive month since August while the labour participation rate, which is the ratio of labour force to the working population (15-64 years old), continued to trend upwards, albeit at a gradual pace to 68.0% in October from 67.9% in September. We notice the net jobs created in October stood at 37.4K, maintaining traction from the month prior of 30.9K. However, those outside the labour force i.e. housewives, students (including those going for further studies), retirees, disabled persons and people seeking employment rose by 0.7% year-on-year to 7.12K in October but fell slightly by 0.1% compared to September. We hold the view that the GDP has most likely peaked in 3Q2017 with a 6.2% growth with our preliminary estimates indicating a 6.0% GDP growth in 4Q2017, bringing the fullyear GDP growth averaging at 5.9%. Hence, we expect the labour market to continue to remain healthy with the unemployment rate expected to hover around 3.3% – 3.4% by the end of 2017 from 3.5% in 2016. For 2018, we expect the unemployment rate to be around 3.2% – 3.3%.

• October unemployment rate continued to stay at 3.4% for the third consecutive month since August. Meanwhile, the labour participation rate, which is the ratio of labour force to the working population (15-64 years old), continued to trend upwards, albeit at a gradual pace to 68.0% in October from 67.9% in September.

• In the meantime, the net jobs created in October stood at 37.4K, maintaining traction from the month prior of 30.9K. Overall, the net jobs created totalled 305K from beginning of 2017, reflecting the improving health of the economy.

• However, those outside the labour force i.e. housewives, students (including those going for further studies), retirees, disabled persons and people seeking employment rose by 0.7% year-on-year to 7.12K in October but fell slightly by 0.1% compared to September. This segment makes up 32% of the labour force. On a side note, the local productivity rate for 3Q rose to 4.17% year-on-year.

• We hold the view that the GDP has most likely peaked in 3Q2017 with a 6.2% growth with our preliminary estimates indicating a 6.0% GDP growth in 4Q2017, bringing the full-year GDP averaging at 5.9%. Considering the high base, we expect GDP growth to expand moderately and should bottom in 1Q2019. Hence, we expect the labour market to continue to remain healthy and should keep the net jobs created in a positive trajectory. We forecast the unemployment rate to hover around 3.3% – 3.4% by the end of 2017 from 3.5% in 2016. For 2018, we expect unemployment rate to be around 3.2% – 3.3%.

Source: AmInvest Research - 19 Dec 2017