New Delhi : India’s unemployment rate was 4.8% in December, according to the monthly Periodic Labour Force Survey (PLFS) data released by the National Statistics Office (NSO) on Thursday, almost the same as the 4.7% reading in November and the second lowest in the nine months beginning April 2025.
Because unemployment rates are likely to be affected by seasonal factors, and we do not have full-year data in the monthly series yet, it is difficult to ascertain whether the sequential changes in unemployment rate suggest an improvement or worsening in labour market conditions.
What we do know is that the second lowest unemployment rate in December is not a function of fewer people seeking jobs. Labour Force Participation Rate (LFPR) in the economy—it is the share of population working or looking for a job—was 42.5% in December 2025, the highest in nine months. LFPR was 42.3% in November.
To be sure, urban and rural parts of the labour market show different trends as far as LFPR is concerned. LFPR did decline in urban areas between November and December and was accompanied by a rise in unemployment, which would suggest a marginal increase in strain in the labour market. Urban unemployment increased 20 basis points—one basis point is one hundredth of a percentage point—to 6.7% in December; while LFPR decreased 30 basis points to 39.8%. In rural India, the unemployment rate was 3.9%, the same as in November and the lowest in the series, despite a rise in LFPR. LFPR in rural areas increased from 43.4% in November to 43.8% in December, the highest in the series.
