JAKARTA – Indonesia’s labor market showed a positive trend in May 2026. Statistics Indonesia (BPS) reported that the number of employed people continued to increase, the unemployment rate declined further, and the average monthly wage of employees rose compared with the previous period.
The data were published in the results of the May 2026 National Labor Force Survey (Sakernas), released by BPS on Tuesday (August 5).
Indonesia’s labor force reached 155.41 million people in May 2026. This represented an increase of around 497 thousand people compared with February 2026, when the labor force stood at 154.91 million. The increase was also accompanied by a rise in the Labor Force Participation Rate (LFPR) to 70.57 percent, up by 0.01 percentage point from February 2026.
Of the total labor force, 148.19 million people were employed. The number of employed people increased by 522 thousand compared with February 2026. Meanwhile, the number of unemployed people declined, bringing the Open Unemployment Rate (OUR) to 4.65 percent, down by 0.03 percentage point from 4.68 percent in February 2026.
Although the national unemployment rate declined, unemployment continued to show a significant gap between urban and rural areas. In urban areas, the OUR stood at 5.54 percent, while in rural areas it was only 3.35 percent.
By gender, the unemployment rate for men reached 4.85 percent, higher than the 4.32 percent recorded for women.
In terms of employment absorption, the Agriculture, Forestry, and Fisheries sector remained the largest employer in Indonesia. As of May 2026, the sector employed 42.60 million workers, accounting for around 28.75 percent of total employment.
BPS data also showed that the majority of workers were employed on a full-time basis. A total of 98.98 million people, or 66.80 percent of all employed workers, worked 35 hours or more per week. This proportion increased slightly from 66.77 percent in February 2026.
Meanwhile, 49.21 million people, or 33.20 percent of total employment, were classified as underemployed. This group consists of part-time workers and half-unemployed workers.
In detail, part-time workers accounted for 25.93 percent, while the proportion of half-unemployed workers stood at 7.28 percent. Compared with February 2026, the share of full-time workers increased, while the proportion of underemployed workers declined slightly.
In addition to improving employment conditions, BPS also recorded an increase in workers’ welfare. The average monthly wage of employees reached IDR 3.39 million in May 2026, higher than in the previous period.
Overall, the May 2026 Sakernas results indicate that Indonesia’s labor market remained on a positive trajectory. The increase in labor force absorption, the decline in unemployment, the higher share of full-time employment, and the rise in average monthly wages all point to improving national labor market conditions.
Nevertheless, BPS data also highlighted several challenges that require attention, particularly the higher unemployment rate in urban areas compared with rural areas, as well as the still-large number of workers employed for fewer than 35 hours per week. These findings indicate that improving the quality of employment opportunities remains a key challenge in fostering a more productive and inclusive labor market.
