India Unemployment Falls to Six-Month Low of 5 % in August

A bit of good news in the Indian job market was the decline of unemployment rate in the country to 5 %, the lowest in six months in August. This development can be attributed to rural India, while the urban India registered an increase in unemployment rates. 

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

The unemployment rate during the month of August was below the expected rate of unemployment rate that was expected in the Reuters survey at 5.2 %, which was the minimum in February when the unemployment rate was at 4.9 %. 

The biggest shift happened in rural India as the unemployment rate fell from 4.5% in July to 4.1 % in August, which was the minimum in January. However, in urban India, the unemployment rate increased from 6.7 % to 6.8 %. 

For male and female in particular, there was improvement on their side too. The unemployment rate of men was 4.9 % compared to 5 % in July, while that of women was 5.1 % from 5.4 %. 

Also, during August, the participation of people into the labor force or into finding employment opportunities increased. Labor Force Participation Rate for individuals above 15 years of age is 55.6% compared to 55.4% in the last month. On the other hand, the Employment Rate rose to 52.8% from 52.5% in the last month. 

The participation rate of females in the labor force increased from 34.4% to 34.8%. This was evident mostly in the rural areas, where the rate of participation increased to 39.4% from 38.8% the previous month. On the other hand, the rate remained mostly unchanged at 25.4% in urban India. 

These numbers are based on the Current Weekly Status indicator of the PLFS survey. The August survey covered a sample size of 370,160 persons across India, which includes 211,353 persons from the rural areas and 158,807 persons from the urban areas. 

Thus, August numbers show a mixed trend beneath the decline in the unemployment rate at the national level, which saw rural unemployment dropping to its lowest level since January while urban unemployment rising marginally.