Urban unemployment rate stagnates at 6.6% in July-Sept

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The urban economy in India has failed to generate a sufficient number of employment in the July-September quarter, Periodic Labour Force data published on 29 November show. The Business Standard has reported that India’s urban unemployment rate stagnated at 6.6 per cent in the July-September (Q2) quarter after inching down two quarters on the trot.

The unemployment rate in the quarters of January-March 2022, April-June 2022, July-September 2022, October-December 2022, January-March 2023, April-June 2023 and July-September 2023 are as follows: 8.2%, 7.6%, 7.2%, 7.2%, 6.8%, 6.6% and 6.6%. The data pertains to age groups 15 years and above.

It is clear that the rate has plateaued in April-June (Q1 of FY24) and July-September (Q2 of FY24).

The stagnation has taken place against a backdrop of higher demand for work – a swelling labour force.

The silver lining seems to be that the unemployment rate in current weekly status (CWS) terms for workers above 15 years in Q2 of FY24 is the lowest in about five years. This is according to the data of quarterly urban jobless that the National Statistical Office (NSO) began publishing in December 2018.

Another point is that the unemployment rate for women crawled down to below 9% which is unprecedented in the past five years. This has happened amidst women labour force participation rate climbing up to 24%, up from 23.2% in Q1 of FY24. The rate was at 21.7% in Q2 of FY23.

Simultaneously, the urban employment rate for women came down to 8.6% in Q2 (July-September) of FY24. In Q1, it stood considerably higher at 9.1%.

The labour force participation rate in July-September 2023 saw a marginal increase to 49.3% from 48.8% in the preceding quarter. It denotes a higher number of people either working or seeking work as a percentage of the urban population. Participation for men rose from 73.5% to 73.8% (compared to the preceding quarter).

It can be noted that the jobless rate in urban India has been steadily declining since it reached a level of 12.6% in April-June (Q1) of FY22, which was affected by the pandemic.

The unemployment rate for people in the 15-29-year age group came down to 17.3% in Q2 from 17.6% in April-June quarter. This is the age when people enter the labour market for the first time.

For men, the share of salaried jobs in July-September quarter fell to 47% from 47.8% in Q1. For women, it came down to 52.8% from 54%.

Some men and women were absorbed as “self-employed”, a term that includes labouring as unpaid helpers in household business or owning a business.

In the second half of November EPFO payroll data proved that fresh job generation in the formal sector inched down for two months on the trot in September.