The number of employed people increased marginally by one million in May 2022, taking the total employment to 404 million (37.07% employment rate) from 402.9 million (37.05%) in April 2022. The unemployment rate also saw a significant decline to 7.12% in May 2022 from 7.83% in April 2022, the latest data by the private think tank Centre for Monitoring Indian Economy (CMIE) shows.

May was the second consecutive month of an increase in employment in the country; the increase was much bigger at nearly 7 million in April, says CMIE CEO Mahesh Vyas. The unemployment rate, however, had risen in April but declined across both rural as well as urban areas to 8.21% and 6.62%, respectively, in May.

Comparatively, the country-wide unemployment rate was 7.83% in April, including 9.22% across urban and 7.18% across rural areas.

"India’s employment data for May 2022 shows stability at the macro level and simultaneously a positive movement of labour at the sectoral level," says Vyas in his weekly labour market analysis.

There is a big shift in employment from agriculture to industry and services in the last two months, he says. "In April, employment in agriculture declined by 5.2 million. But, the industry added 5.5 million and services added another 6.7 million. As a result, net employment increased by a handsome 7 million in April. In May, agriculture shed a much larger 9.6 million jobs. But, industry absorbed 10 million and services another half a million," shows the CMIE data.

Cumulatively, agriculture shed 14.7 million jobs in April and May, but industry provided 15.6 million jobs and services provided another 7.2 million jobs, resulting in a net addition of 8 million jobs during these two months.

"Arguably, industry and services harness labour more productively than agriculture and therefore there is reason to cheer this recent transition," writes Vyas.

Further, within the industry, the absorption of additional labour is more across manufacturing than construction. This is a trend reversal from FY22 when manufacturing accounted for 32% of jobs and construction 65% and the rest were absorbed by utilities. During April and May, 34% of jobs went to manufacturing and 65% to construction, the CMIE data shows.

The total jobs across manufacturing are rising but are still below the pre-pandemic era. By May, the total employment in manufacturing reached 34 million, an increase of 5.4 million jobs, the data shows.

Within manufacturing, metals added the most number of employees, with total jobs touching the 9.4 million mark in May. Constructions added 6 million jobs in May, while 4 million in April, showing a steady recovery post the easing of the mobility curbs.

In service, the retail sector led the pack in total jobs reaching 71.4 million in May, a marginal dip from 72.9 million in April.

The financial services industry also showed signs of recovery since the onset of the pandemic. From 6.1 million jobs during 2019-20 ( pre-pandemic), jobs in this industry rose to 7.83 million in FY22. In May, these jobs increased to 7.85 million.

In June, the onset of kharif sowing season is expected to boost the demand in the labour market, which could lead to a further rise in the country's employment rate.

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