September unemployment data show significant changes

The unemployment rate inched up to 6.6 per cent in September 2018. And, the labour participation rate also scaled up to 43.2 per cent. In August, the unemployment rate was 6.3 per cent and labour participation was 42.5 per cent.

It is important to understand these estimates in the light of the demonetisation shock of November 2016.

Demonetisation had led to a sharp fall in the labour participation rate. Before demonetisation, labour participation was of the order of 46-47 per cent. That is, about 47 per cent of the working age population were either working or were looking for a