• The unemployment rate was unchanged at 4.8% in December (Nov: 4.8%), reflecting the impact of the COVID-19 pandemic
  • Unemployed persons (1.1% MoM; Nov: 2.2%): increase moderately, bringing the total number of unemployed persons increased to 772.9k (Nov: 764.4k).
     
• Employment growth (0.1% MoM; Nov: -0.1%) rebounded, whilst labour force growth expanded (0.2% MoM; Nov: 0.0%)
  • Labour force: increased and reaching a new record high (15.988m persons; Nov: 15.960m).
  • New job creation: rebounded to a three-month high (19.3k; Nov: -11.0k).
     
• Labour force participation rate unchanged (68.4%; Nov: 68.4%)
  • Growth of the number of people outside of the labour force muted (0.0%; Nov: 0.4%) mainly due to schooling and training.
     
• Unemployment rate remained elevated globally
  • US: unemployment rate eased in January (6.3%; Dec: 6.7%), mainly because more people dropped out of the labour force and increased in the number of employments.
  • JP: unemployment rate was unchanged in December (2.9%; Nov: 2.9%) with 2020 reached 2.8% (2019: 2.4%).
     
• Unemployment rate to remain elevated in the near term before it gradually eases to 4.0% in 2021 (2020: 4.5%)
  • The labour market will continue to grapple with rising local COVID-19 cases and the impact of Movement Control Order 2.0 in most states since 13 January.
  • Nonetheless, we forecast the unemployment rate to ease to 4.0% (MoF: 3.5%) this year given the likelihood of a wider rollout of COVID-19 vaccines and a potential recovery of the manufacturing sector, in line with a projected rebound in 2021 GDP growth (3.9%; 2020F: -5.3%).

Source: Kenanga Research - 9 Feb 2021