National rate edges down, youth unemployment climbs
Statistics Indonesia (BPS) recorded the 4.65 percent rate in its May 2026 National Labor Force Survey, known as Sakernas, released on August 5. That was a slight decrease from February's 4.68 percent and represented about 7.22 million unemployed people, according to the IDN Research Institute's account of the findings.
Under BPS and International Labour Organization standards, the open unemployment rate, abbreviated TPT, expresses the number of job seekers as a share of the national labor force.
For people ages 15 to 24, the rate moved in the opposite direction: it reached 17.37 percent in May, following 16.36 percent in February 2026 and 16.26 percent in November 2025. Those figures mark increases across three consecutive survey periods.
Government credits recovery and investment incentives
Haryo Limanseto, spokesperson for the Coordinating Ministry for Economic Affairs, attributed the national result to real-sector programs and investment incentives that he said had helped meet labor market needs. He also credited a sustained national economic recovery.
The labor force numbered 155.41 million in 2026, compared with 83.32 million in the 1990s. Limanseto said keeping unemployment near its historical low despite that expansion demonstrated rapid job creation and worker absorption across economic sectors. The current rate is close to the 4.36 percent recorded in 1994.
Indonesia's unemployment rate reached 11.24 percent in 2005, when weak labor absorption and domestic economic pressures followed the monetary crisis. During the COVID-19 pandemic, it rose to 7.07 percent in 2020.
Limanseto described the subsequent decline as evidence of effective economic management and recovering industrial competitiveness. He said the government remained committed to vocational training, skills development and helping industry absorb more workers.
Informal employment accounts for most jobs
The May survey counted 148.19 million employed people. BPS data cited by the IDN Research Institute put informal employment at 87.88 million, or 59.30 percent of the total. Formal employment accounted for the remaining 60.31 million, or 40.70 percent.
Part-time workers numbered 38.42 million, representing 25.93 percent of employed people. A further 10.79 million, or 7.28 percent, were underemployed, meaning they were still seeking or willing to take additional work. BPS grouped these two categories as underutilized workers, accounting for a combined 33.20 percent of employment.
BPS reported average monthly pay of Rp3.39 million for laborers, employees and staff in May. That wage measure applies only to wage-earning workers, who constitute 37.09 percent of all employed people.
Separate reports document layoffs
Layoff figures accompanied the decline in national unemployment. According to The Jakarta Post, Manpower Ministry records showed that 43,805 workers lost their jobs and were registered under the Job Loss Insurance program, or JKP, during the first half of 2026. West Java had the largest share of those workers, at 20.16 percent.
Separately, the Indonesian Employers Association, known as Apindo, reported at least 126,000 layoffs between January and May 2026.
