India’s Unemployment Rate Eases to 5.1% in August 2025

India’s unemployment rate for persons aged 15 years and above eased for the second straight month in August 2025, settling at 5.1%. The latest data from the Periodic Labour Force Survey (PLFS), released by the Ministry of Statistics and Programme Implementation (MoSPI), showed a steady decline from 5.2% in July and 5.6% in both May and June. With this fall, the rate has returned closer to April’s 5.1% level, reflecting an improvement in labour market conditions.

Male Unemployment Trends

The decline in the unemployment rate was primarily led by male workers. Male unemployment dropped to 5% in August, marking its lowest level in five months. The improvement was more pronounced in urban regions, where male unemployment eased to 5.9% from 6.6% in July. In rural areas, male unemployment continued its downward trajectory, falling to 4.5% in August after consistent declines over the past four months.

Rural vs Urban Patterns

Overall rural unemployment has now been on a declining trend for three consecutive months. It fell to 4.3% in August from 5.1% in May, supported by seasonal demand in agriculture and allied activities. Urban areas also saw improvements, particularly in male employment, though the overall urban unemployment rate remained higher than rural levels, underlining structural differences in job creation between the two regions.

Female Participation Improves

Female workforce participation also showed encouraging signs. The Worker Population Ratio (WPR) for females rose to 32% in August from 30.2% in June. The Labour Force Participation Rate (LFPR) for women climbed to 33.7%, with rural female participation improving to 37.4% and urban participation at 26.1%. These trends contributed to an overall WPR of 52.2% and an LFPR of 55% for persons aged 15 years and above.

Survey Methodology

The August estimates are based on responses from 3,76,839 individuals under the revised PLFS framework introduced in January 2025. The survey applies the Current Weekly Status (CWS) approach, which measures employment activity during the seven days preceding the survey. This methodology allows for a more frequent and updated assessment of labour market conditions compared with earlier annual surveys.

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Conclusion

The August 2025 data suggests that India’s labour market is showing gradual signs of resilience, with unemployment easing for both men and women and rural areas leading the improvement. The gains in female participation are particularly noteworthy, indicating a broader base of workforce involvement. However, the sustained gap between rural and urban unemployment highlights the need for stronger job creation in urban centres.

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