● The unemployment rate held steady for the fourth straight month at 3.6% in December (Nov: 3.6%) and remained the lowest since February 2020. Overall 2022 unemployment rate settled at 3.8%, matching house forecast

- Unemployed persons (-0.2% MoM; Nov: -0.2%): It declined for seventeen straight months, reflecting a continued improvement in the labour market.

- Consequently, the number of unemployed persons fell to 599.6k (Nov: 600.9k), the lowest since February 2020. Similarly, actively unemployed fell to 484.0k (Nov: 488.0k), the lowest since April 2020.

● Employment continued to expand for the seventeen months (0.1% MoM; albeit at a slower rate, bringing total employment to 16.13m people, a record high

- Labour force: growth expanded at a slower pace (0.1% MoM; Nov: 0.2%), with the total labour force expanding to a record high of 16.73m persons (Nov: 16.71m).

- New job creation: smaller expansion (21.8k; Nov: 27.1k) in seventeen months.

● Labour force participation rate was unchanged (69.8%; Nov: 69.8%) and remained the highest recorded since the data was made available in January 2015

- The number of those outside the labour force expanded slightly and for the first time since July 2021 (0.05% MoM; Nov: -0.02%), reaching 7.239m.

● Unemployment rate remained lower among advanced economies reflecting a steady job market

- JP: unchanged (Dec: 2.5%; Nov: 2.5%) and remained the lowest reading since February 2020, with the 2022 average unemployment rate settled at 2.6% (2021: 2.8%).

- US: inched down (Jan: 3.4%; Dec 22: 3.5%), reflecting a resilient labour market despite ongoing financial tightening and uncertainty of the global economic outlook.

● 2023 unemployment rate forecast retained at 3.3% (2022: 3.8%)

- The labour market has demonstrated a robust recovery in 2022 and in recent months, mainly backed by various government policy support and sustained recovery in the services sector, particularly the tourism and transportation sub-sectors. The momentum is expected to continue in 2023, underpinned by robust domestic demand and expansion in economic activities, which is likely to continue supporting hiring activities.

- Given the improvement in labour market, we retained the 4Q22 GDP forecast at 6.6% (3Q22: 14.2%), which is slated to be released this Friday. Therefore, 2022 GDP is likely to settle at 8.6% (2021: 3.1%), and we expect GDP growth to moderate sharply to 4.3% in 2023 amid an increasing prospect of a global economic slowdown.

Source: Kenanga Research - 10 Feb 2023