India's unemployment rate hit three-month high of 5% in January

India's unemployment rate climbed to 5% in January, a three-month high, as rural seasonal factors and post-harvest slack pushed joblessness up, even as labour force participation softened

India’s unemployment rate edged up to a three-month high of 5 per cent in January, reflecting seasonal weakness in rural labour markets and a post-harvest slowdown, according to the latest Periodic Labour Force Survey (PLFS) monthly bulletin released by the National Statistics Office (NSO) on Monday.

 

The NSO placed the urban unemployment rate in current weekly status terms at 7 per cent in January, a marginal increase from 6.7 per cent in December. In rural areas, this rate rose to 4.2 per cent, also marking a three-month high.

 

Under the current weekly status framework, activity status is determined over the seven days preceding the survey. A person is classified as unemployed if he/she did not work for even one hour on any day during the reference week but sought or was available for work for at least one hour on any day during that period.

 

The overall unemployment rate among men rose slightly to 4.8 per cent in January, from 4.7 per cent a month earlier. The female unemployment rate climbed more sharply, reaching a seven-month high of 5.6 per cent compared with 4.9 per cent in December.

 

Meanwhile, the labour force participation rate (LFPR) -- the proportion of the population either employed or actively seeking work -- stood at 55.9 per cent in January, broadly stable compared with 56.1 per cent in the previous month.

 

In rural areas, the participation rate was recorded at 58.7 per cent, compared with 59 per cent in December, while the urban rate rose marginally to 50.3 per cent from 50.2 per cent.

 

The worker population ratio, which measures the share of employed persons in the population, declined to 53.1 per cent in January from 53.4 per cent in December. Among rural workers, the male and female worker population ratios eased to 75.7 per cent and 38 per cent, respectively, from 76 per cent and 38.6 per cent in the preceding month.

 

“The decline in LFPR and WPR and rise in UR in January 2026 is primarily rural-driven, with seasonal factors, post-harvest slack, and discouragement effects playing a key role. Many activities such as construction, agriculture-allied work, transport and small trade tend to slow during winter. Urban areas remained stable,” the NSO said in a statement.

 

The sampling methodology of the PLFS was revamped by the NSO from January 2025 to enable the estimation of key employment and unemployment indicators on a monthly basis for both rural and urban areas under the current weekly status method at the all-India level.