As per the CMIE data, Unemployment rate in the country increased to 8.87 per cent in the week ended July 5 from 8.59 per cent a week ago, with urban unemployment rate rising to 11.26 per cent from 10.69 per cent and rural unemployment rate rising to 7.78 per cent from 7.62 per cent.
The data suggests that India is likely to settle at an unemployment rate slightly higher than the pre-lockdown level, CMIE said.
Though the unemployment rate continues to be higher than pre-lockdown levels at 11 per cent in June, it fell sharply from 23.5 per cent in May, along with a recovery in the labour participation rate from 38.2 per cent to 40.3 per cent.
“The data so far therefore seems to suggest that the worst is over and we are likely to settle at an unemployment rate which would be only slightly higher than the rates witnessed before the lockdown.
The unemployment rate during the weeks of June 28 and July 5 were 8.6 per cent and 8.9 per cent, 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,” CMIE said.
The recovery in labour participation rate too recorded a slowdown, in line with the unemployment rate. “The recovery in June, of 218 basis points was slower than the 258 basis points recovery seen in May.
And further, in an uncanny similarity with the trend in unemployment, weekly data suggest that the improvements in the labour participation rates may have peaked out,” it added.
The estimated employment in June was 374 million, 30 million below the average 404 million employment in 2019-20. “This gap may have shrunk a little more in the first week of July,” it said. Haryana, Tripura, Kerala, Jharkhand were among the states with the highest unemployment rates in June.