Recovery in employment rate slows down in July at 1.7 percentage points: CMIE

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The recovery in employment rate slowed down in July at 1.7 percentage points compared to June when it stood at 6.7 percentage points suggesting slowdown in initial recovery in economic activity, the Centre for Monitoring Indian Economy said in its weekly report.

Employment rate had fallen drastically by 11.9 percentage points in April, the first month of the lockdown, to 27.2% from an average of 39.1% during January-March 2020.

CMIE data for the week ended August 2 showed the employment rate in July stood at 37.6%, which it says is much lower than what it was during 2019-20. Employment rate stood at 39% in the pre-Covid period.

“The recovery process accelerated in June and continued into July. Yet, it is not complete and the recovery process has slowed down,” CMIE said.

According to CMIE, the labour force in July 2020 was still nearly 3% lower than the average labour force in 2019-20 and so is the number of persons employed. “There is much to catch up as the population of young potential labour market entrants continues to grow,” CMIE added.

On the positive side, the unemployment rate in July 2020 of 7.4% was at the pre-lockdown levels. This is lower than the average unemployment rate of 7.6 per cent during 2019-20 though slightly higher than the 7.3% in July 2019. The unemployment rate in February and March 2020 stood at 7.8% and 8.8% respectively.

Even the labour participation rate has increased marginally in July at 40.7% compared to 40.3% in June, though it continues to be significantly lower than the average of 42.7% recorded in 2019-20 or the 42.5% recorded during January-March 2020.

“Therefore, while the unemployment rate has recovered to its pre-lockdown, the labour participation rate has not recovered as yet,” it said.

“An economic recovery is underway from the precipitous fall of April. But, the recovery momentum could be petering out well before the recovery is complete,” CMIE added.

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Tagged cmie, CMIE data, employment rate, Job Openings, Labour Force, New jobs, the centre for monitoring indian economy

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