The Unemployment Trend over the Last Three Years in Malaysia; 2014, 2015 and 2016

Unemployment is the circumstance where a person, actively seeking for employment, is unable to land a job and is also used as a measure of the strength of the economy. This assignment discusses the unemployment trend over the last three years in Malaysia; 2014, 2015 and 2016 using data measured by the Bureau of Labor Statistics (BLS), the Department of Labor. Monthly data produced by the BLS on the unemployment rate of the labor market, which covers about 60,000 households, includes the types of employment, period of average workweek and the time span of unemployment.

The BLS categorizes each adult from age 16 and above of each surveyed household by referring to the answers of the survey questions. These individuals are classified into employed, unemployed and not in labor force. Economic growth is a long-term development of the productive prospect of the economy. Principally, it is the ascending trend of net national product at a uniform price. However some economists disagree, insisting that the sum of national income may be elevating yet the standard of living may be depreciating. This may occur when the population is increasing at a quicker pace than the total national income.

According to the Department of Statistics Malaysia, the nation's unemployment rate remained at 2.9% in the month of April 2014. The increase of 161,200 employed individuals in manufacturing caused a 0.1% decrease from the 3% registered in the March 2014. Year over year, the unemployment rate decreased by 0.1% from the 3% in April 2013. The month on month unemployment rate was comparatively at 2.9%, however year over year it was 3.1% in contrast with 3.3% in April 2013. Simultaneously, the rate of labor force participation increased by 67.3% in April 2014, from 66.9% in the prior month.

The expansion of 0.4% was an addition in the increment of population in the labor market by 0.5% as stated by the statistics department. Year over year, the labor force participation rate increased by 0.9% from 66.4% in April 2013. The unemployment rate for July 2014 decreased to 2.8% from 3% in July 2013. The labor force participation rate declined in July 2014 to 67.4% from 67.5% in the earlier month.

The population of labor market rate decreased by 0.2% causing a decrease of 0.1%. Year over year correlation demonstrated that the labor force rate decreased by 0.3% from 67.7% in July 2013. The unemployment rate declined to 2.7% in August 2014 from 3.1% in the year before. In July 2014, it was 2.8%. The labor force participation rate in August dropped to 67.1% from 67.6% around the same time a year ago because of individuals aged 15 to 19 stated the statistics department. The participation rate was 0.3% lower compared to July.

Based on the Maybank Investment Bank Research, the unemployment rate averaged higher at 3.1% for 2015 from the 2.9% for 2014. In April 2015, the rate of unemployment remained at 3% as the quantity of unemployed dropped to 429,000 from 430,800 in March 2015 though it was 5.4% a year prior when the unemployment rate was 2.9%. In March 2015, the periodic-adjusted unemployment rate rose up by 0.1%. It emphasized that the moderately steady unemployment rate due to the increase in total labor force was coordinated by the employment growth which is 2%. The unemployment rate in October 2015 increased to 3.1% from October 2014. The unemployment rate fell 0.1% on October. The labor force participation rate remained at 67.9% similar to the months before.

Malaysia's unemployment rate was unfaltering at 3.4% for the third continuous month in February 2016, however remained most elevated since November 2013. The periodic-adjusted rate was likewise steady at 3.2% (January 2016: 3.2%). According to the Maybank IB Research, they anticipated the unemployment rate to average 3.5% in 2016, from 3.2% in 2015. Total labor force expanded at a slower rate by 1% year over year to 14.7 million while employment growth decreased to 0.7% year over year to 14.2 million.

The ascent of unemployed decreased to 9.7% year over year to 506,000 in February in contrast to 11.4% year over year in January. The labor force rose to 0.4%, employment increased by 0.3% and unemployed escalated by 1.0%. The Labor Force Participation Rate decreased to 67.6% in February 2016 from 67.7% a month before. (Refer to Appendix I)

In the markets in the region of Asia, the GDP growth rate of the country and the labour markets follow a similar trend. The labour market is considered to be one of the key components that needed to be stressed in an economic environment of a country. A labour market can be diversified into two sectors such as such as the rural and the urban division the early years of Malaysia, the country’s economic efforts were mainly eyed on the rural areas executing jobs in the agriculture, livestock and mining sectors.

As the country grew we should not ignore the fact that globalization of the world’s economy has greatly affected us causing the country to shift its focus its economic towards the urban areas as the jobs on the demand are mostly industrial, manufacturing goods and services sectors which causes the population to concentrate and migrate to urban surroundings.

Based on a publication by the Bank Negara, the country has overall experienced a stronger growth of 6.0% in the year of 2014 due to the fact that it was 4.7% in the previous year. This is the case as the growth was derived from the constant private domestic demand which was further elevated by strong external trade performance. This was a relief to Malaysia’s economy as this is the first year of a positive outcome after facing negative contribution from the last seven years consecutively.

This came upon us due to the fact that our country exports were gaining from the recovery efforts in the advance economies and were experiencing constant demand across our markets as well as products. Towards this time period, our net exports also grew at a margin of 19.7 in the year 2014. Based on the fact that the growth of imports were at a lower capacity if compared to the growth of real export of goods and services, the country’s GDP growth gained an overall 1.4 percentage points.

Moving on to the next year, 2015, the country was facing a very tough economic environment and yet manage to grow by 5.0% but still was lower than the previous year which recorder it’s growth at 6.0%. The 5.0% growth was largely due to the continued expansion of our domestic demand. In the first half of the year, growth of domestic demand was remaining strong and sturdy which partly mirrored the front loading of consumption spending.