India's unemployment plunges to 8-month low of 4.7% in November
What's the story
India's unemployment rate has dropped to an eight-month low of 4.7% in November, down from 5.2% in October, official data released today showed. The decline is mainly attributed to improved labor market conditions driven by stronger rural employment and increased female participation. The improvement was broad-based across geographies with rural unemployment easing to 3.9%, its lowest since April, while urban unemployment fell to match earlier this year's low at 6.5%.
Participation surge
LFPR reaches highest level since April
The improvement in job conditions coincided with a steady rise in labor force participation. The labor force participation rate (LFPR) for those aged 15 years and above rose to 55.8% in November, the highest since April. This jump was largely driven by rural areas where participation continued to improve, even as urban LFPR slipped to a five-month low of 50.4%.
Gender gap
Female participation drives market improvement
The improving labor market picture was largely driven by female participation which climbed to 35.1% last month, extending a steady upward trend that began in June. The gains were concentrated in rural areas, while urban female participation remained largely flat. The gap between male and female unemployment also narrowed with male unemployment at 4.6% compared to women at 4.8%, reducing the gender gap to just 0.2%.
Progress
Youth unemployment declines
Youth unemployment had also moderated, falling to 14.1% in November from 14.9% in October. This decline is another indicator of a gradual improvement in employment prospects. The easing of unemployment comes at a crucial time for the economy, as the Reserve Bank of India has warned about a possible slowdown in growth during Q3. The strengthening labor market might help mitigate the impact of slower economic momentum in the near term.