Joblessness Hits Sub-5% after 8 Months; Youth and Urban Gender Gaps Persist

India’s labour market has delivered a quietly consequential signal. Unemployment fell sharply in November to 4.7%, its lowest level so far this financial year, after months of stagnation around the 5.1–5.2% mark. The decline was broad-based, spanning rural and urban India, men and women alike.

Rural unemployment fell from 4.4% to 3.9%, while urban unemployment eased from 7% to 6.5%. On paper, these may look like modest shifts. In reality, they mark a break from a frustrating pattern India has grown used to—growth that shows up in GDP tables but not on shop floors or worksites. This time, hiring appears to have strengthened enough to take in new job-seekers without simply shuffling numbers around.

(Note: Unless otherwise mentioned, all numbers pertain to those aged above 15 years.)

For the second month running, unemployment among rural women aged 15–29 has edged down, from 14.1% in September and 13.2% in October to 12.5% in November. Young rural men saw a similar decline, with unemployment falling to 12.4% from 13.2% in the previous month. These figures are still uncomfortably high, but labour markets rarely turn around sharply. What matters is momentum.

The gains were not limited to these groups but spread more broadly, indicating an improving job market, though unemployment continues to be stubbornly high for the youth and for women in urban areas. 

Just as important is what happened alongside falling unemployment. The LFPR rose to 55.8% in November from 55.4% in October, the highest this year, and the story is almost entirely rural. Participation there increased by 0.8 percentage points to 58.6%, with women driving most of the change. A 1.3 percentage point rise in female participation in a single month is not a quirk of the data. It suggests that something real is shifting in rural labour markets.

This is important because falling unemployment is often misleading. It can just as easily mean people have stopped looking for work. That is not what appears to be happening here. More people—particularly rural women—are entering the workforce and finding employment.

In urban India, however, the overall LFPR remained stable, with a slight drop this month.

Taken together, the November data mark a rare moment of improvement in India’s labour market. Inflation has softened, unemployment is easing, and participation, at least in rural India, is rising. Add to this the recent notification of four labour codes, and the policy narrative tilts towards cautious optimism. Structural reforms rarely deliver immediate labour market dividends, but the timing is favourable. If hiring momentum sustains into the coming quarters, the codes could reinforce, rather than merely promise, job creation.

Yet it would be a mistake to read these numbers as a clean bill of health. Young Indians aged 15–29 remain roughly three times more likely to be unemployed than the population as a whole. That is a structural feature of India’s labour market, reflecting skill mismatches, slow formal job creation, and the limited capacity of high-productivity sectors to absorb first-time entrants at scale.

Urban women face an even starker reality. Around one in four women in urban areas who are part of the labour force remains unemployed.

The Methodology

These estimates are drawn from the PLFS, a large and credible household survey conducted by the Ministry of Statistics and Programme Implementation, using the current weekly status approach.

A person who is looking for work but unable to find it is considered unemployed. This excludes those who are neither working nor seeking work. The survey considers a person as unemployed in a week if they did not work even for one hour on any day during the reference week but sought or were available for work at least for an hour on any day during the reference week. 

The November 2025 estimates are based on the survey of 373,229 individuals from 89,174 households. 

India does not have, nor should it chase, a single “ideal” unemployment number. Some frictional unemployment is natural, even healthy, in a dynamic economy. Many estimates place that range between 3–5%. By that yardstick, India’s headline rate is not alarming. The problem is distributional. Unemployment is concentrated where it is most damaging: among the young, among urban women, and in segments where prolonged joblessness erodes skills and future earnings.

November’s data, then, should be read neither as triumph nor illusion. They mark a genuine improvement, especially in rural labour markets and female participation. The numbers also make one thing clear: this job is far from done. What matters now is not a few more months of lower unemployment, but whether India can build a labour market that actually absorbs its young, opens up for women, and holds together as growth unfolds.