● The unemployment rate edged down to 3.2% in October after it remained at and above 3.3% since February this year

• Seasonally adjusted basis: unemployment dropped to 3.2% from 3.3% in the preceding month.
• Unemployed persons fell 1.8% MoM (Sep: +0.2%), bringing the total unemployed to 512.1k (Sep: 521.4k).

● Labour force and employment growth moderated at the same pace of 0.2% MoM (Sep: 0.3%)

• The overall labour force expanded to 15.78m persons in October (Sep: 15.75m).
• New job creation increased to 35.7k (Sep: 44.1k) during the month.
• Growth in the employment of the manufacturing sector decreased by 0.02% MoM in October (Sep: -0.13%) to 1.087m while its payroll also declined by 0.3% MoM to RM3.997b (Sep: RM4.011b).

● Labour force participation rate unchanged at 68.7% for two straight months

• Labour force (+0.2% MoM; Sep: +0.3%) grew at the same pace as those outside labour force (+0.2% MoM; Sep: -0.2%) .
• Job vacancies was lower in September at 75.5k (Aug: 78.4k), of which 64.7% are of low-skilled jobs (Aug: 64.4%).

● Stable labour conditions globally

• US: jobless rate back to the lowest in nearly five decades at 3.5% in November (Oct: 3.6%) partly due to the return of General Motors (GM) workers following a lengthy strike.
• EU: the unemployment rate remained steady at 6.3% in October, the lowest since 2000.

● Overall, we revised our unemployment rate forecast to 3.3% this year from initial target of 3.5% (2018: 3.3%) as the labour market seemed to remained steady despite a slowing growth trend for this year (KIBB 2019 forecast: 4.5%; 2018: 4.7%)

• The latest Manufacturing PMI survey also highlighted that employment levels remained stable though the PMI reading stayed in contraction for 14 straight months, albeit improving.
• Optimism towards the US-China phase-one trade deal may also support the expansion in domestic hiring activities in spite of a weaker global outlook on growth and trade activities going forward.

Source: Kenanga Research - 16 Dec 2019