Unemployment Rate Declines 7.7% In May Amid Fall In Labour Participation: CMIE

India witnessed decline in unemployment rate to 7.7% in May as a result of dip in labour participation at 441.9 million, according to a data released by private economic think tank CMIE.

It is worth mentioning that unemployment rate in India among people aged 15 years and above came down to 7.7% in May 2023, from 8.5% in the previous month, CMIE's Natasha Somayya K said in an analysis on its website.

The unemployment rate tumbled as a result of a decline in the labour participation, which implies a fall in the number of people who entered the labour market in search of work, according to a PTI report.

Compared to April, labour participation rate (LPR) fell by 1.1 percentage point to 39.6 per cent in May, she said.

"This drop in LPR in May was expected because April witnessed a large number of people entering the labour force but only a small share was able to secure employment in the month. This was bound to discourage many from searching for work in the month of May. As a result, the labour force shrunk in size from 453.5 million to 441.9 million," she noted.

Meanwhile, the decline in labour participation in May 2023 was considerably higher in rural India compared to urban India, stated the PTI report.

She stated that in urban India, the labour force shrunk by close to 4.5 million.

There were around 147 million people in the urban labour force in April, which inched down to 142.5 million in May.

According to the CMIE (Centre for Monitoring Indian Economy) data, the urban labour market recorded a fall in the number of employed as well as unemployed people, added PTI report.

The 4.5 million fewer people in the urban labour force in May was the result of a combination of a decline in jobs by around 2.4 million and a fall in the number of unemployed in urban India by 2.1 million, it said.

This resulted in a total of 129.5 million people in the urban workforce, and around 13 million unemployed persons, it added.