The urban unemployment rate fell to 6.6 percent in the first quarter (April-June) of fiscal 2025, from a peak of 6.7 percent in the previous quarter. The decline was driven by a drop in the male unemployment rate, according to quarterly data from the Periodic Labour Force Survey (PLFS) released by the National Bureau of Statistics (NSO) on Friday.
The unemployment rate according to current weekly status (CWS) for men, where activity status is determined based on the reference period of the last seven days prior to the survey date, was 5.8 percent during the quarter, down from 6.1 percent in the previous quarter.
In contrast, the unemployment rate among women rose to 9 percent in the first quarter of fiscal year 2025, from 8.5 percent in the fourth quarter of fiscal year 2024.
The survey further found that the unemployment rate for youth (15-29 years) also declined to 16.8 percent in Q1 FY25, from 17 percent in the previous quarter. This figure is important because people in this age group are typically new to the labor market, and this metric reflects the robustness of the labor market. While the unemployment rate for young men declined, the unemployment rate for young women increased over the quarter.
As for the labor force participation rate (LFPR), which represents the percentage of people working or looking for work in the urban population, the survey showed a marginal decline from 50.2 percent in the fourth quarter of FY 2024 to 50.1 percent in the first quarter of FY 2025.
While men showed more enthusiasm for their work, their LFPR rose to 74.7 percent from 74.4 percent in the previous quarter. Female workers withdrew from the labor force, while their LFPR fell to 25.2 percent from 25.6 percent in the previous quarter.
In terms of overall employment status, the survey found that the share of self-employed people fell to 40 percent from 40.5 percent in the previous quarter.
Meanwhile, the share of salaried and temporary workers rose to 49 percent and 11 percent respectively in the quarter. The share of female workers in regular employment rose from 52.3 percent in the period to 54 percent.
Labor economists distinguish between these categories of work and generally consider wage employment to be the best form of work of the three.
The share of employees in the tertiary sector, the largest employer in urban areas, rose to 62.4 percent in Q1 FY25 from 62.2 percent in the previous quarter. Meanwhile, the share of employees in the secondary (manufacturing) sector also rose to 32.1 percent from 32 percent in the period.
Recognizing the importance of having regular labour force data available, the NSO launched India’s first computer-based survey in April 2017 to measure the dynamics of labour force participation in urban areas every three months.
First publication: Aug 16, 2024 | 7:21 PM IST