• The number of employed persons continue to increase

• The unemployed persons dropped further

• Unemployment rate fell to pre-pandemic levels of 3.3%

• Participation rate remained at 70.1%

• Global labor market remains strong

• Steady labor outlook mainly supported by domestic demand

OVERVIEW

The performance of the labor force portrayed an improvement in November 2023, signaling the positive growth of the current economy. The number of employed persons continued to rise with an addition of 0.2% MoM, reaching a total of 16.43mn persons. In contrast, the number of unemployed persons in November saw a persistent decrease, marking a reduction of 0.3% MoM to 569.2 thousand persons. The unemployment rate during the month fell to its pre-pandemic levels of 3.3% while the labor force participation rate in November stood at 70.1%

The labor market in November maintained steady gains with the continuous increase in the number of employed persons, whereas unemployment further declined.

In November 2023, the number of employed persons continued on an upward trend, registering a month-on-month increase of 0.2% (+27.9k persons) to 16.43mn persons (Oct: 16.40mn persons). Likewise, the year-on-year growth showed an increase of 2.0% (+322.5k persons) in the number of employed persons as compared to November last year (16.11mn persons). Across various economic sectors, the number of employed persons in the Services sector remained increased, particularly in Information & communication; Food & beverage services; and Transportation & storage activities. Similarly, the Manufacturing, Construction and Mining & quarrying sectors also showed rises in the number of employed persons in November 2023. Meanwhile, the Agriculture sector recorded a decline in the number of employed persons during the same month. The employment-to-population ratio, which indicates the ability of an economy to create employment, increased to 67.8% in November compared to the previous month compared to the previous month (Oct: 67.7%). As compared to the same period one year prior, the ratio saw a growth of 0.5 percentage points from 67.3% in November 2022

The employees’ category which was the largest composition of the total employed persons with a share of 75.3%, posted a slight increase of 0.1% (+16.2k persons) to 12.37mn persons (Oct: 12.35mn persons). Similarly, the own-account workers category also rose to 2.99mn persons (Oct: 2.99mn persons), with an addition of 0.3% (+9.4k persons). Informal jobs/workers i.e., Own Account Workers (i.e., daily income earners working as petty traders, hawkers, food stalls operators as well as smallholders plus gig workers) has been rising since January 2021 (2.39mn), and remained at a new high.

The number of labor force continued to trend up in November, rising by 0.2% MoM to 17.0mn persons (Oct: 16.97mn persons). The labor force participation rate (LFPR) during the month was unchanged at 70.1%. Annually, the number of labor force increased by 1.7% or (+291.0k persons) as compared to 16.71mn persons in November 2022. Subsequently, the LFPR rose by 0.3 percentage points from 69.8% in the same month of the preceding year.

The number of persons outside labor force was on a downward trend, with a reduction of 2.2k persons (-0.03%) in November to 7.24mn persons (Oct: 7.24mn persons). Year-on-year comparison, this group reduced by 0.004% or 0.3k persons (Nov’22: 7.24mn persons). Housework/ family responsibilities were the main reasons for the outside labor force with 42.6%, followed by schooling/ training with 41.1%.

The number of unemployed persons in November continued to be on a declining trend, with a reduction of 0.3% MoM (-1.7k persons) to 569.2k persons (Oct: 570.9k persons). November’s unemployment rate fell to 3.3% and returned to the pre-pandemic level, compared to 3.4% recorded last month. The number of unemployed persons continued to fall by 5.3% YoY (-31.7k persons), as compared to 600.9k persons recorded in the same month of the preceding year. Accordingly, the unemployment rate declined by 0.3 percentage points as against 3.6% in November 2022.

The unemployment rate for youth aged 15 to 24 years declined by 0.1 percentage points to 10.6% in November, registering 308.5k unemployed youths (Oct: 313.3k persons). On the same note, the unemployment rate among youth aged 15 to 30 years edged down 0.1 percentage points to 6.5%, with the number of unemployed youths at 432.0k persons (Oct: 6.6%; 439.6k persons).

Global labor market remains strong

The latest US Labor Market Report showed a broadly resilient US labor market with non-farm payrolls (NFP) came in hot as it added 216k jobs in December, up from the prior 173k (revised down from 199k). The unemployment rate was unchanged at 3.7% but the labor force participation saw a notable decline to 62.5% from 62.8%. Unemployment in the Eurozone has fallen to a joint record low, suggesting Europe’s jobs market remains strong despite the weak growth in the region. The jobless rate in the Eurozone dipped to 6.4% last November, down from 6.5% in October, matching the record low set in June. A year earlier, the unemployment rate was 6.7%. During November, Eurozone unemployment dropped by around 99,000 to 10.97mn. Meanwhile, the youth unemployment rate, reflecting those under 25 seeking employment, fell to 14.5% from the previous month's 14.8%. Japan’s unemployment rate stood at 2.5% in November 2023, unchanged from the previous month. It was also the lowest jobless rate since January 2023 as the number of employed persons increased by 560k to 67.8mn, outpacing a rise in the number of unemployed people by 40k to 1.69mn.

Source: BIMB Securities Research - 12 Jan 2024