It’s the economy, stupid! Where have all the jobs gone?
We love India Data Hub’s weekly newsletter, ‘This Week in Data’, which neatly wraps up all major macro data stories for the week. We love it so much, in fact, that we’ve taken it upon ourselves to create a simple, digestible version of their newsletter for those of you that don’t like econ-speak. Think of us as a cover band, reproducing their ideas in our own style. Attribute all insights, here, to India Data Hub. All mistakes, of course, are our own.
New workers, worse jobs
Last week, it seemed like there was a general drop in the white-collar jobs available in India.
We have new government data on jobs to pore over, this time around. The Central Statistical Office (CSO) just put out its quarterly ‘Periodic Labour Force Survey’ report, covering the employment landscape in Indian cities between January to March.
Headlines first: urban unemployment is slightly lower than it was in the March quarter last year. Only slightly, though. Our unemployment rate has been stuck slightly below 7% for 15 months. It’s not going up, sure, but it isn’t falling lower either.
But what does our ‘unemployment rate’ really tell us? It’s a measure of the people that want to work but don’t have a job. It depends on two things: one, how many jobs there are; and two, how many people want to work. Of course, if your economy is facing problems and there aren’t enough jobs to go around, that shows up in a high unemployment rate. Equally, though, if your economy is doing alright, and many more people want to work than before, you can still end up with a high unemployment rate.
So, do more Indians want to work? Or, in boring-speak, has our ‘Labour Force Participation Rate’ (LFPR) risen? Yes! India’s urban LFPR jumped by 1.70% last quarter. That is, well over a million and a half new workers joined the workforce in those three months. With this increase, more than half of all urban Indians above the age of 15 are now part of the workforce.
A lot of these new workers are women. See, traditionally, many Indian women have kept away (or, quite often, were forced to keep away) from work. We’ve been chipping away at this problem, though. Five years ago, less than 20% of urban Indian women were in the labour force. Now, that figure has inched up to 25%.
Behind our stagnant unemployment rate, then, are tens of lakhs of new jobs, which are hidden behind an even larger deluge of new workers.
About 47% of India’s urban population above the age of 15 is working. This is heartening. Five years ago, this figure was closer to 42%. In absolute terms, urban India has 15-20% more workers than it did back in 2019.
There’s one more layer to this, though: not all jobs are made equal.
While we certainly have more jobs than we did before the COVID-19 pandemic hit, these may be worse in quality. It’s hard to know for sure, though. We only have really crude markers for this. Many people that can’t find themselves a regular, salaried job try to make ends meet by throwing together a small business (remember when pakoras had become the heart of a massive political controversy?). The percentage of urban Indian workers that are self-employed has gone up by 1%, while those earning regular wages have dropped a little. This is more pronounced for women than for men. It could be that they’ve become self-employed because there’s nothing else for them to do.
That’s just one interpretation, though. Is it the right one? Have people given up on finding jobs, or are they becoming more entrepreneurial? Is the gig economy simply fulfilling its promise? Again, it’s hard to know for sure.
Inflation falls marginally
There are two ways we could talk about April’s inflation numbers. On the one hand, at 4.83% (compared to April last year), our inflation is the lowest it has been in a year.
On the other hand, not much has really changed. Inflation fell by a negligible 0.02% from a month ago. Core inflation dropped lower, to 3.2%, but food and beverage inflation went up by 0.2%, to a 4-month high of 7.9% year-on-year.
This is the last bit of data on inflation that the RBI will be carrying into its Monetary Policy Committee (MPC) meeting in June. (We’ve gone into why the RBI cares about inflation before.) With no real surprises in the data since April, when the MPC last met, chances are that it keeps things exactly how they are.
Exports rise, imports rise more
India’s merchandise trade deficit spiked in April. To US$ 19.1 billion! That is, last month, we imported goods worth US$ 19.1 billion more than we exported. That’s the highest it’s been in six months, and a third higher than April last year!
How did we get here? Well, our exports did alright. They were 1% higher than in April, in fact. For a quick breakdown:
- Electronics exports jumped by 25%, year-on-year.
- Chemical exports, too, grew by 18% year-on-year.
- Textile exports didn’t do much.
- The export of gems and jewellery fell slightly – in the single digits.
The spike, it seems, comes from a huge jump in our imports:
- Our gold imports tripled.
- Oil imports jumped by 20%.
- We also imported 10% more electronics than last year.
We actually imported less of everything else. Even so, an increase in the imports of these three goods opened up our trade deficit quite substantially.
That’s it for this week, folks. Thanks for reading!
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