Urban employment shoots up to 35% last week despite intermittent local lockdowns: CMIE

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Despite intermittent lockdown in most towns, urban employment for the week ended July 19 shot up to 35.1%, after its great fall in April, when the nationwide lockdown was imposed in the country to prevent the spread of Covid-19.

Even the marginal dip in overall employment rate in July after sharp pickup in June has reversed with employment rate at 38.41% for the week ended July 19, almost at par with June 21 level of 38.42%, suggesting the equilibrium is setting in the labour market, the Centre for Monitoring Indian Economy has said.

Workers who are back into jobs include maids, cooks, drivers, cleaners and construction workers among others, it said. “In spite of these intermittent lockdowns many types of services have resumed with restrictions. The net result is that slowly employment is returning,”CMIE said in its weekly report.

According to CMIE, while the employment rate has continued its recovery in July, the average employment rate during the first three weeks of the month was 37.5%, much lower than 39.2% average in the first quarter of 2020. “The 170 basis point difference between the two implies that employment is still around 18 million short of what it was a few months ago,” it said. CMIE had earlier said that 122 million jobs were lost in April of which 91 million recovered in June after the country was unlocked on June 1.

CMIE weekly report on the labour market scenario in India shows labour participation picked up in the week ended July 19 and stood at 41.7% after sliding in the three weeks from the high of 42% in the third week of June. The unemployment rate, however, inched up to 7.9% for the week ended July 19 from 7.4% in the previous week.

However, CMIE feels that India faces a serious challenge of gradual decline in the employment rate which has fallen from around 43% in 2016 to less than 40% in 2019 with the average employment rate during the first quarter of 2020 at 39.2%. The situation deteriorated In April 2020 when the employment rate fell to 27.2% with 122 million people thrown out of work.

CMIE preliminary labour statistics for the first three weeks of July indicate a further improvement in labour conditions in the month though the gain hasn’t been as smooth and as confident as it was in June.

“We have worried about the June recovery facing fatigue towards the end of the month and in early July. But, the net results seem to be headed towards consolidating and making further gains in July albeit lesser than in June,” it concluded.

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Tagged cmie, coronavirus, COVID-19, employment rate, jobs, lockdowns, overall employment rate, unemployment rate

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