Urban unemployment hits lowest level in 5 years, decreasing to 6.8% in 2022-23: PLFS 

PLFS data reveals that the urban unemployment rate reached its lowest point in all quarters of 2022-23, marking a significant improvement since 2018-19


The latest findings from the periodic labour force survey (PLFS)  show a continued decline in the urban unemployment rate, reaching a notable milestone in the January to March 2023 quarter. This marks the seventh consecutive quarter of improvement, indicating a positive trajectory for the urban labour market’s recovery from the impact of the pandemic.

The data reveals that the unemployment rate among individuals aged 15 years and above in urban areas decreased to 6.8 per cent during this period. These encouraging numbers defy concerns surrounding economic slowdown, underscoring a resilient and growing urban employment landscape.

The recently recorded unemployment rate for the January to March 2023 quarter represents the lowest quarterly figure since the survey’s inception.

The unemployment rate has been decreasing steadily from a high of 20.8 per cent during the April-June 2020 quarter, reaching 12.6 per cent in April-June 2021. In the two preceding quarters, it was at 7.2 per cent, but rose slightly to 8.2 per cent in January-March 2022. 

The unemployment rate represents the percentage of unemployed individuals among those in the labour force. This information is based on the person’s activity status within the last seven days prior to the survey, known as the Current Weekly Status (CWS).

The latest data from the Ministry of Statistics and Programme Implementation shows that there is still a difference in employment trends between men and women.

In urban areas, the unemployment rate for men above 15 years old was lower at 6 per cent in the January-March 2023 quarter, compared to 6.5 per cent in the previous quarter (October-December 2022). However, for women, the unemployment rate was higher at 9.2 per cent, slightly lower than the 9.6 per cent recorded in the previous quarter.

On the other hand, the urban labour force participation rate (LFPR) for all age groups slightly increased to 38.1 per cent in the fourth quarter of the last fiscal year, up from 37.9 per cent in the October-December 2022 period. For individuals above 15 years old, the urban LFPR was even higher at 48.5 per cent in the fourth quarter of FY23.

The LFPR, which stands for labour force participation rate, represents the percentage of individuals in the population who are either employed, actively seeking work, or available for work. In urban areas, the LFPR for males above the age of 15 years remained significantly high at 73.5 per cent. For women, however, the LFPR was at 22.7 per cent. In the previous quarter, the LFPR was similar, with men at 73.3 per cent and women at 22.3 per cent.

The percentage of unpaid family labour in household enterprises increased from 5.9 per cent to 6.1 per cent in the January-March 2023 quarter, indicating ongoing challenges in the labour market.

In urban areas, approximately 48.9 per cent of individuals above 15 years old held regular or wage salaried jobs, while 11.7 per cent were engaged in casual labour by the end of March 2023.Around 39.5 per cent of individuals were self-employed, and 32.7 per cent worked as own account workers.

The PLFS, conducted by the National Sample Survey Office, provides employment indicators every three months exclusively for urban areas.

However, this data contradicts other indicators such as EPFO’s payroll data, which has shown a decline in formal sector employment recently. The CMIE all India unemployment rate reached a four-month high of 8.11 per cent in April, with more individuals joining the workforce.

The Indian Staffing Federation reported a 14 per cent YoY growth in flexi staffing in 2022-23, creating 0.17 million new jobs compared to 0.23 million jobs in 2021-22, which saw a 21.9 per cent growth.

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