Urban unemployment declines to 6.6% in Q1

Employment in urban areas in the first quarter of 2024-25 (FY25) improved over the previous one.

The unemployment rate in April-June (Q1) declined to 6.6 per cent from a four-quarter high of 6.7 per cent in January-March FY24 owing to the fall in the male unemployment rate, according to the quarterly Periodic Labour Force Survey (PLFS) data, released by the National Statistical Office (NSO) on Friday.

The headline unemployment rate under the current weekly status (CWS) for men, where activity status is determined based on the reference period over the past seven days preceding the date of the survey, stood at 5.8 per cent during the quarter, down from the 6.1 per cent in the preceding quarter.

In contrast, the female unemployment rate increased to 9 per cent in Q1FY25 from 8.5 per cent in Q4FY24.

The survey further showed the jobless rate for the youth (15-29) declined to 16.8 per cent in Q1FY25 from 17 per cent in the preceding quarter.

This figure is important because people belonging to this age group are usually first-timers in the labour market and this metric reflects the robustness.

While the jobless rate for young males declined, the unemployment rate for young females shot up during the quarter.

On the labour force participation rate (LFPR), which represents the share of people either working or seeking employment in the urban population, the survey showed a marginal decline to 50.1 per cent in Q1FY25 from 50.2 per cent in Q4FY24.

While men showed greater enthusiasm for work, shown in their LFPR increasing to 74.7 per cent from 74.4 per cent in the preceding quarter, women workers withdrew from the workforce with their LFPR falling to 25.2 per cent from 25.6 per cent in the previous three-month period.

In terms of the broad status of employment, the survey showed the share of people engaged in self-employment declined to 40 per cent from 40.5 per cent in the preceding quarter.

Meanwhile, the share of salaried workers and casual workers increased to 49 per cent and 11 per cent, respectively, during the quarter.

The share of female workers in regular work witnessed an increase to 54 per cent from 52.3 per cent during this period.

Labour economists distinguish between these categories of work and generally consider wage/salaried employment as a better form of employment among the three.

The share of workers in the tertiary sector, which is the biggest employer in the urban areas, rose to 62.4 per cent in Q1FY25 from 62.2 per cent in the preceding quarter.

Meanwhile, the share of workers in the secondary (manufacturing) sector also increased to 32.1 per cent from 32 per cent during this period.

Given the importance of having labour force data available at frequent intervals, the NSO launched India’s first computer-based survey to measure labour force participation dynamics at three-month intervals for urban areas in April 2017.