● The unemployment rate remained at 3.9% in May (Apr: 3.9%)

- Unemployed persons (-1.8% MoM; Apr: -3.0%): fell for the tenth straight month, albeit at a moderate pace following a sharp decline in the previous month.

- The number of unemployed persons fell to 637.7k (Apr: 649.3k), almost reaching pre-pandemic levels (Mar 2020: 610.5k).

● Employment expanded at a slower pace (0.3% MoM; Apr: 0.5%), but the persistent new job creation pushed employment to 15.9m person, a record high

- Labour force: growth expanded at a slower rate (0.2% MoM; Apr: 0.4%), subsequently expanding the total labour force to a record high of 16.54m persons (Apr: 16.50m).

- New job creation: sustained expansion (46.5k; Apr: 84.1k).

● Labour force participation rate expanded for the third straight month (69.5%; Apr: 69.4%), a new record high

- The number of those outside the labour force fell for the tenth straight month (-0.1% MoM; Apr: -0.5%) to 7.26m, the lowest since Feb 2020, reflecting a sustained recovery in the labour force as more people searching for new jobs.

● Mild recovery in the labour market conditions among regional economies

- KR: unemployment rate expanded (2.8%; Apr: 2.7%) but is relatively low amid an acceleration in the inflation rate.

- JP: unemployment rate inched up in May (2.6%; Apr: 2.5%), marking its first rise in four months due to more people searching for jobs in view of relatively slower job creation.

● 2022 unemployment rate forecast retained at 3.9% (2021: 4.6%) and is expected to improve to 3.4% in 2023

- The decline in unemployed person is expected to continue in the coming months following the strong recovery in the labour market mainly backed by the gradual pickup in economic and social activities as well as ongoing government policy support. This will be further bolstered with the resumption of international tourism as the government is targeting 4.5m tourist arrivals for 2022.

- In spite of our better outlook on the labour front, we maintain our cautiously optimistic outlook as downside risks persist mainly associated with the latest development of COVID-19 in view of a potential surge of new sub-variant as recorded in other countries. Against this backdrop, we retained our 2022 GDP growth forecast at 5.0% - 5.5% (2021: 3.1%).

Source: Kenanga Research - 8 Jul 2022