India’s labour market picks up in July as unemployment falls to 5.1%

India’s labour market showed a broad-based improvement in July, with unemployment falling to 5.1% from 5.5% in June and labour force participation rebounding after a softer April-June quarter, according to the latest PLFS data released by MoSPI.Labour participation reboundsThe overall Labour Force Participation Rate (LFPR) for people aged 15 years and above rose to 55.4% in July from 54.4% in June, reversing the decline seen between March and May. Rural participation led the recovery, climbing to 58% from 56.6%, while urban LFPR edged up to 50.4% from 50.1%.The improvement comes after the April-June quarter had seen overall LFPR fall to 54.6% from 55.5% in January-March. Rural LFPR had declined to 56.9% from 58.2%, while urban LFPR remained broadly unchanged at 50.2%.Female participation provided another positive signal. Overall female LFPR rose sharply to 34.4% in July from 32.7% in June, with rural female participation increasing to 38.8% from 36.6%. Urban female LFPR saw a smaller rise to 25.3% from 24.8%.Unemployment falls, rural areas leadThe unemployment rate for people aged 15 years and above fell to 5.1% in July from 5.5% in June. Rural unemployment dropped to 4.5% from 5%, while urban unemployment was broadly stable at 6.7%, compared with 6.6% in June.The improvement was visible across genders in most segments. Overall male unemployment fell to 5% from 5.3%, while rural male unemployment declined to 4.6%. Urban male unemployment also remained broadly stable month-on-month, but was lower at 5.9% than 6.6% a year earlier.Female unemployment also declined overall and in rural areas, although urban female unemployment rose to 8.8% from 8.4% in June.More people are workingThe Worker Population Ratio (WPR), which measures the share of the population employed, rose to 52.5% in July from 51.4% in June — its first increase since February. Rural WPR increased more sharply to 55.4% from 53.8%, while urban WPR edged up to 47%.The July figures suggest that the labour market regained momentum after a softer second quarter. Importantly, the rise in participation was accompanied by an increase in the share of people actually working, rather than being driven solely by more people entering the labour force.The PLFS data also show that the improvement is not confined to a single segment: rural employment indicators strengthened notably, while female participation picked up. The data therefore point to a broader improvement in labour-market conditions in July, even as urban unemployment and female urban unemployment remain areas to watch.

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