Urban unemployment rate falls to 6.8% in March quarter: PLFS

The urban unemployment rate dipped further in the January to March 2023 quarter, according to the periodic labour force survey and declined for the seventh straight quarter, indicating that the urban labour market is on the path to recovery after the pandemic.

The unemployment rate in current weekly status (CWS) for persons of age 15 years and above in urban areas declined to 6.8% in the January to March 2023 quarter, belying concerns about a slowdown in economic activities.

This was the lowest quarterly unemployment rate since the inception of the survey.

GDP data for the fourth quarter, which will be released on May 31, will provide key indicators on how the economy performed.

Job creation is expected to be a key issue in the spate of state elections coming up.

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The unemployment rate was at 7.2% in the two preceding quarters and at 8.2% in the January-March 2022 quarter.

It has been on a declining trajectory since April to June 2021 when it touched 12.6%.

It had hit a record high of 20.8% in the April to June 2020 quarter due to the national lockdown during the Covid-19 pandemic.

The unemployment rate is defined as the percentage of persons unemployed among the persons in the labour force.

The activity status determined on the basis of a reference period of last seven days preceding the date of survey is known as the CWS of the person.

According to the PLFS data released by the ministry of statistics and programme implementation on Monday, the difference in employment trends for men and women continued.

The unemployment rate amongst men above 15 years of age in urban areas was even lower at 6% in the January to March 2023 quarter as against 6.5% in the October to December 2022 quarter.

For women, it was much higher at 9.2%, marginally lower than 9.6% in the previous quarter.

The urban labour force participation rate (LFPR) for all ages, however, inched up to a high of 38.1% in the fourth quarter of last fiscal from 37.9% in the October to December 2022 period.

The urban LFPR for persons above 15 years of age was even higher at 48.5% in the fourth quarter of FY23.

LFPR is defined as the percentage of persons in labour force (that is working or seeking or available for work) in the population.

The LFPR for males above the age of 15 years in urban areas was significantly high at 73.5% while for women it was at 22.7%. It was almost at the same level at 73.3% for men and 22.3% for women in the previous quarter.

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The share of helpers in household enterprises, which translates to unpaid family labour, rose to 6.1% in the January to March 2023 quarter from 5.9% in the previous quarter, indicating continued pain in the labour markets. About 48.9% of the persons above 15 years of age in urban areas were in regular or wage salaried jobs while 11.7% were casual labour in the quarter ended March 31, 2023. About 39.5% of the persons were self-employed while 32.7% persons were own account workers.

The PLFS is conducted by the National Sample Survey Office to estimate the key employment indicators at an interval of three months for urban areas only.

The data is however, at variance with more high frequency indicators such as the EPFO’s payroll data that has shown a decline in formal sector employment in recent months. Joblessness as measured by the CMIE all India Unemployment Rate rose to a four-month high of 8.11% in April with more people joining the workforce in the month.

A recent report by the Indian Staffing Federation also reported a 14% year on year growth in flexi staffing in 2022-23 with 0.17 million new jobs created in the segment as against 0.23 million jobs added in 2021-22, when the industry registered a 21.9% growth.