India’s latest labour report: Jobs expand in December, unemployment rate stays below 5%

India’s unemployment rate for persons aged 15 years and above rose to 4.8 per cent in December, up from a seven-month low of 4.7 per cent in November, according to the Periodic Labour Force Survey (PLFS) released on Thursday.

Despite the slight uptick in unemployment, key labour market indicators pointed to continued improvement in labour force participation and employment, led by rural areas and higher female workforce engagement.

Labour force participation hits 2025 high

The PLFS, conducted by the National Statistical Office of the Ministry of Statistics & Programme Implementation (MoSPI), stated that the overall Labour Force Participation Rate (LFPR) increased to 56.1 per cent in December, the highest level recorded so far in 2025, extending its steady rise since June.

The improvement was driven largely by rural areas, where LFPR rose to 59 per cent in comparison to 58.6 per cent in November, while urban LFPR dipped slightly to 50.2 per cent from 50.4 per cent during the same period.

Female participation strengthened further, with female LFPR rising to a yearly high of 35.3 per cent in December, supported mainly by rural areas where participation increased to 40.1 per cent. Urban female LFPR edged down slightly to 25.3 per cent.

Rural job market steady, urban unemployment ticks up

Rural unemployment remained unchanged at 3.9 per cent, while urban unemployment increased to 6.7 per cent from 6.5 per cent in November, reflecting relatively weaker labour market conditions in cities.

Employment ratio improves across the economy

The Worker Population Ratio (WPR) also improved. The overall WPR rose to 53.4 per cent in December, up from 53.2 per cent in November and the highest level recorded during the year. Rural WPR increased to 56.7 per cent, while urban WPR remained broadly stable at 46.8 per cent.

WPR measures the share of employed persons in the total population.

Female employment continued to rise gradually, with overall female WPR increasing to 33.6 per cent in December from 33.4 per cent in the previous month. Rural female WPR rose to 38.6 per cent, while urban female WPR remained around 23.0 per cent.

Gender-wise unemployment shows mixed trends

Unemployment trends across gender were mixed. Overall female unemployment edged up to 4.9 per cent in December from 4.8 per cent in November, even as urban female unemployment declined to 9.1 per cent, easing from its October peak. Rural female unemployment increased marginally to 3.6 per cent.

Among men, the overall unemployment rate rose slightly to 4.7 per cent. Rural male unemployment remained stable at 4.1 per cent, while urban male unemployment increased to 5.9 per cent in December.

Overall, PLFS data show that India’s labour market in December 2025 was marked by a marginal increase in unemployment alongside rising participation and employment, with rural areas and women continuing to drive improvements, even as urban labour market conditions remained comparatively softer.