Unemployment falls to 17-week low as demand for work declines
The unemployment rate fell to a 17-week low to 5.96% for the week ended January 16, partly because fewer people turned up for work amid the surge in Covid cases. Yet, demand for workforce in certain sectors such as e-commerce, retail and healthcare in urban areas and for agricultural activity in rural areas, continues to be high.
The previous low rate for unemployment was 5.89% for the week ended September 19, 2021, according to the Centre for Monitoring Indian Economy (CMIE). In the interim, the rate hovered between 6.1% and 8.8%.
CMIE’s MD & CEO Mahesh Vyas told FE: “The Labour Force Participation Rate (LFPR) has fallen. The effect of the pandemic is on the labour participation rate that is down to less than 40% now. It was above 40% for quite some time. Even in middle of December, it was over 41%. As the LFPR has come down, the unemployment rate has also come down,” Vyas said.
LFPR is a measure of the proportion of a country’s working-age population that engages actively in the labour market, either by working or looking for work.
Rachit Mathur, founder & CEO, Avenue Growth, an on-demand work platform, said the third wave has not derailed company’s hiring plans. In fact, it has gone up across sectors.
“We are seeing a steady rise in demand from retail, e-commerce, healthcare and IT sectors. Demand for specialised skill sets like nurses, cyber security and SaaS consultants are also going up,” he said.
According to CMIE, the urban unemployment rate for the week ended January 16, 2022, was down to 8%, compared with 10% for the week ended on December 12. During the same time, the rural unemployment rate fell to 4.99% from 7.82%.
During the first wave of the pandemic period of April-June in 2020, the weekly unemployment rate skyrocketed to 27.11% for the week ended May 3, but fell to 4.66% in the week ended January 17 last year. It rose again to 14.73% in the seven days to May 23, 2021, and fell again to 5.89% for the week ended on September 19, 2021.