Unemployment falls to eight-month low of 4.7% in November

Unemployment rate for November

India’s unemployment rate fell to an eight-month low of 4.7 percent in November, down from 5.2 percent in October, as labour market conditions improved on the back of stronger rural employment and rising female participation, official data released on December 15 showed.

The decline was broad-based across geographies. Rural unemployment eased to 3.9 percent, its lowest level since April, while urban unemployment fell to 6.5 percent, matching the lowest reading recorded earlier this year.

The improvement in job conditions coincided with a steady rise in labour force participation. The labour force participation rate (LFPR) for persons aged 15 years and above rose to 55.8 percent in November—the highest level since April. The uptick was driven largely by rural areas, where participation continued to strengthen, even as urban LFPR slipped to a five-month low of 50.4 percent.

Female participation remains the key driver

Female participation continued to underpin the improving labour market picture. The female LFPR climbed to 35.1 percent in November, extending a steady upward trend that began in June. The gains were concentrated in rural areas, while urban female participation remained largely flat.

The gap between male and female unemployment also narrowed. Male unemployment stood at 4.6 percent, compared with 4.8 percent for women, reducing the gender gap to just 0.2 percentage point.

Youth unemployment eases

Youth unemployment also moderated, falling to 14.1 percent in November from 14.9 percent in October, adding to signs of a gradual improvement in employment prospects.

The easing in unemployment comes at a crucial juncture for the economy, as the Reserve Bank of India has flagged a likely cooling in growth during the third quarter. The strengthening labour market could help cushion the impact of slower economic momentum in the near term.