India’s unemployment rate climbed to the highest in more than two years in October as joblessness in rural areas increased, according to a private research firm.
The overall rate rose to 10.05% last month from 7.09% in September, data from the Centre for Monitoring Indian Economy Ltd. showed, the highest since May 2021. Rural unemployment jumped to 10.82% from 6.2%, while the urban rate eased slightly to 8.44%.
The weakest monsoon rains in five years is weighing on farming output in the world’s second-biggest producer of rice, wheat and sugar. In urban areas, though, economic activity has been relatively strong, with manufacturing and consumption expanding.
The government publishes a country-wide unemployment rate only on an annual basis, and a rate for urban areas every quarter. The most recent official report, released in October, puts the unemployment rate for the country at 3.2% for 2022-2023.
Economists have come to rely on the CMIE data for a better assessment of the labor market. The figures are based on monthly surveys of more than 170,000 households.
While India’s economy is expected to grow more than 6% this year and next, among the fastest in the world, that’s still not rapid enough to create jobs for the millions that need it. The CMIE data shows nearly 10 million people entered the job market in October in the hopes of finding some work.
Last month, Indian tech-services outsourcing firms, including Infosys Ltd. and Wipro Ltd., announced plan to halt hiring of college graduates, potentially leaving thousands of fresh engineering students without jobs. That could fuel discontent among the country’s youth and create problems for Prime Minister Narendra Modi as he seeks a third term in office in elections next year.