Unemployment rate in the country more than halved to 11% in June from 23.5% in May. Employment rate also improved handsomely from 29.2% in May to 35.9% in June, implying an addition of 70 million jobs, the Centre for Monitoring Indian Economy (CMIE) said.
“The 11% unemployment rate of June is still quite high compared to the less than 8% rate witnessed before the lockdown began. The unemployment rate had been rising steadily since 2017-18 when it had averaged 4.6%. In 2018-19, it rose to 6.3% then in 2019-20, further to 7.6%,” CMIE said in its latest weekly report.
However, it said the declining trend in the unemployment rate seen in June seems to be flattening out. The rate began to fall in the week ended May 31 when it fell to 20.2% after hovering around 24% in the three preceding weeks.
“The unemployment rate during the weeks of June 28 and July 5 were 8.6% and 8.9%, respectively. While the worst of April and May is over, it may be equally likely that the period of rapid recovery seen in June is also over,” the CMIE said.
The recovery in labour participation rate is slowing down also. The recovery in June by 218 basis points was slower than the 258 basis points recovery seen in May. Also, weekly data suggest that the improvements in the labour participation rates may have peaked out.
The improvement in the employment rate in June followed a smaller improvement in the ratio witnessed in May. While the improvement in the employment rate in May led to the addition of 21 million jobs, the improvement in June implied an addition of 70 million jobs.