he official jobless rate has crept up as more people report being in search of work, while informal employment continues to dominate the labor market, increasing the risk of Indonesia getting caught in the middle-income trap.
Statistics Indonesia (BPS) revealed in a press conference on Thursday that the number of unemployed increased by more than 140,000 people from 7.24 million in February to 7.38 million in August. The unemployment rate worsened from 4.68 percent to 4.75 percent over the same period.
BPS official Edy Mahmud said in the press conference that agriculture, trade and the manufacturing industry “absorbed most of the workforce”, employing nearly 60 percent of 147 million working Indonesians.
[Ra::Official unemployment decline contrasts with rise in layoffs::/business/2026/08/10/official-unemployment-decline-contrasts-with-rise-in-layoffs]
Coordinating Economy Minister Airlangga Hartarto did not address the decline in a press conference on Thursday but pointed out that August’s unemployment figure “went down” by 77,000 people compared with the same month of last year.
Compared with August 2025, the figure indeed declined from 7.46 million and the unemployment rate also improved from 4.85 percent.
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“The informal sector has also increased, […] and certainly, moving forward, we’ll strive for the number of workers to go up in the formal sector,” said Airlangga.