India: Job losses may have narrowed

  • The week ended 24 May 20 recorded an unemployment rate of 24.3%. This is a shade higher than the 24.0% unemployment rate recorded in the preceding week.
  • The unemployment rate has risen from 8.8% in Mar 20 to 23.5% in Apr 20 and seems to have remained stable at the elevated rate of around 24% in May 20.
  • The labour participation rate, on the other hand, which had dropped from 41.9% in Mar 20 to 35.6% in Apr 20, seems to be regaining a substantial part of the lost ground in May.
  • The LPR has been rising almost consistently week-after-week in the month. It reached 38.8% as of the week ended 17 May 20 indicating a recovery of nearly half the lost ground of Apr 20. The small fall in the latest week does not take away this evidently rising trend.
  • So, it seems that a fairly large chunk of labour that had technically left the labour markets in Apr 20 is returning back. The discouraged workers seem to be coming back to look for jobs.
  • A stable unemployment rate and a rising labour participation rate imply an increase in the employment rate. This has indeed increased from an average of 27% through most of Apr 20 to 29% through most of May 20.
  • This 2 percentage point increase implies that about 20 million people may have been added to the count of those that are employed.

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