Urban unemployment rate hits fresh low of 6.4% in Q2 FY25: PLFS data

In a positive sign, the urban unemployment rate in the September quarter of the current financial year (Q2FY25) declined to a fresh low of 6.4 per cent since the data was started to be compiled in 2017, due to a sharper dip in female unemployment rate, according to the quarterly Periodic Labour Force Survey (PLFS) data for urban India released by the National Statistical Office (NSO) on Monday.

 

The joblessness rate in Q1FY25 had declined to 6.6 per cent from a four-quarter high of 6.7 per cent in Q4FY24.

 

The headline unemployment rate under the current weekly status (CWS) for women, where activity status is determined based on the reference period over the past seven days preceding the date of the survey, stood at 8.4 per cent during the quarter, down from the 9 per cent in the preceding quarter.

 

In contrast, the male unemployment rate declined to 5.7 per cent in Q2FY25 from 5.8 per cent in Q1FY25.

 

The survey further showed the urban unemployment rate for the youth (15-29 years) declined to 15.9 per cent in Q2 from 16.8 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. The joblessness rate for young females declined at a faster pace than the rate for young males 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 an improvement to 50.4 per cent in Q2 from 50.1 per cent in Q1.

 

While both men and women showed greater enthusiasm to work in Q2 than Q1, LFPR for men (75 per cent) remained far higher than that for women (25.5 per cent) in Q2. 

 

In terms of the broad status of employment, the survey showed the share of self-employed men (39.8 per cent) declined while the share of self-employed women (40.3 per cent) increased in Q2 compared to the preceding quarter.

 

In the meantime, the share of salaried workers increased to 49.4 per cent while the share of casual workers declined to 10.7 per cent during the quarter. The share of female salaried workers declined to 53.8 per cent while that of male salaried workers rose to 47.9 per cent during Q2.

 

Labour economists generally consider wage/salaried employment as a better form of employment compared to self-employment or casual employment.

 

The share of workers in the tertiary (services) sector, which is the biggest employer in urban areas, declined marginally to 62.3 per cent in Q2 from 62.4 per cent in the preceding quarter.

 

Meanwhile, the share of workers in the secondary (manufacturing) sector also increased to 32.3 in Q2 from 32.1 per cent in Q1.

 

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.