India’s unemployment rate remains steady in June at 5.6%, but LFPR slips as less people looked for jobs | Business News

The monthly jobs data is based on the Current Weekly Status (CWS) approach. Under this approach, the activity status of a person is measured for the seven days preceding the date of survey.

Although the headline unemployment number was steady, the figures for rural and urban areas moved in opposite directions. While rural unemployment declined by 20 basis points (bps) to 4.9 per cent in June, urban unemployment rose by 20 bps to 7.1 per cent for those aged 15 years and above.

According to the Ministry of Statistics and Programme Implementation (MoSPI), the decrease in the unemployment rate among rural males and females in June was due to an increase in the share of own-account workers, with seasonal factors “prompting individuals to engage in small-scale or self-initiated activities” such as petty trade, repair work, or services.

Meanwhile, an increase in urban unemployment was particularly pronounced among the youth, with the jobless rate increasing to 18.8 per cent from 17.9 per cent in May for those in the 15-29 years age bracket. Female youth unemployment rose by 140 bps to 25.8 per cent, while for males the increase was 80 bps to 16.6 per cent. At an all-India level, youth unemployment rose by 30 bps to 15.3 per cent in June.

Summer pangs

While the all-India unemployment rate was steady at 5.6 per cent after posting a 50 bps increase in May, the LFPR declined for the second month in a row for most segments of the population in rural and urban areas.

The biggest fall in LFPR was seen among young females in rural areas, for whom the ratio decreased by 240 bps to 20.5 per cent. The fall among males in rural areas in the 15-29 years age bracket was approximately half that, at 110 bps, as their LFPR declined to 62.0 per cent. The decline seen in the Worker Population Ratio (WPR) was similar: at an all-India level, the WPR declined by 50 bps to 51.2 per cent.

The LFPR is the fraction of the population that is seeking or available for work, while the WPR is the percentage of employed persons in the population.

According to MoSPI, the fall in LFPR and WPR in June was “largely influenced by seasonal agricultural patterns, intense summer heat limiting outdoor physical work, and a shift of some unpaid helpers, particularly from higher-income rural households, towards domestic chores”.

The June PLFS report is the third-ever monthly labour market data from the statistics ministry. Back in June, while detailing data for May, MoSPI had cautioned that a rise in the unemployment rate did not necessarily reflect “secular trends” as changes were to be expected in the monthly data on account of increased frequency of the survey and seasonal, academic, and labour market factors.

A total of 3.8 lakh persons were surveyed by MoSPI in June, roughly the same as in April and May. As part of the revamped survey design for the PLFS adopted in January, a rotational panel sampling design is being used. Under this, each selected household is visited four times in four consecutive months. This ensures that three-fourths of first-stage sampling units, or FSUs, are matched between two consecutive months.