Unemployment rate in India climbs to 5.6% in May 2025

India's unemployment rate increased to 5.6 per cent in May 2025, up from 5.1 per cent in April, according to the latest Periodic Labour Force Survey (PLFS) released by the Ministry of Statistics and Programme Implementation (MoSPI) on Monday.

The rise in unemployment was observed across both rural and urban areas, with youth unemployment reaching 13.7 per cent in rural regions and 17.9 per cent in urban centers. 

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The Labour Force Participation Rate (LFPR), which measures the proportion of people aged 15 and above who are either working or actively seeking work, stood at 54.8 per cent in May, a decline from 55.6 per cent in April.

The Worker Population Ratio (WPR), indicating the proportion of employed individuals among the working-age population, also slipped month-on-month. In May 2025, the WPR in rural areas for persons aged 15 and above was 54.1 per cent, while in urban areas, it stood at 46.9 per cent. The overall WPR declined to 51.7 per cent in May from 52.8 per cent in April.

The rise in unemployment is largely attributed to seasonal factors, particularly the end of the Rabi harvest season, which typically leads to a temporary reduction in agricultural jobs for both men and women. Additionally, higher temperatures in May limited outdoor work in several regions. The ministry noted that in some higher-income rural households—particularly in the top three deciles—unpaid helpers, especially women, may have temporarily withdrawn from the workforce to attend to domestic responsibilities.

In urban areas, the changes were more marginal, with small declines seen in own-account workers and casual laborers contributing to a subdued rise in the unemployment rate.

The PLFS data, now released monthly, provides more timely insights into the labor market, aiding policymakers in addressing employment challenges. While the increase in unemployment is concerning, it is largely seen as a seasonal fluctuation rather than a long-term trend.