{"id":378971,"date":"2024-05-23T11:27:21","date_gmt":"2024-05-23T05:57:21","guid":{"rendered":"https:\/\/zerodha.com\/z-connect\/?p=378971"},"modified":"2024-05-23T11:29:02","modified_gmt":"2024-05-23T05:59:02","slug":"its-the-economy-stupid-where-have-all-the-jobs-gone","status":"publish","type":"post","link":"https:\/\/zerodha.com\/z-connect\/subtext\/its-the-economy-stupid-where-have-all-the-jobs-gone","title":{"rendered":"It\u2019s the economy, stupid! Where have all the jobs gone?"},"content":{"rendered":"\n

We love India Data Hub\u2019s weekly newsletter, \u2018<\/em>This Week in Data<\/em><\/a>\u2019, which neatly wraps up all major macro data stories for the week. We love it so much, in fact, that we\u2019ve taken it upon ourselves to create a simple, digestible version of their newsletter for those of you that don\u2019t 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. <\/em><\/p>\n\n\n\n

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New workers, worse jobs<\/strong><\/h3>\n\n\n\n

Last week<\/a>, it seemed like there was a general drop in the white-collar jobs available in India.<\/p>\n\n\n\n

We have new government data on jobs to pore over, this time around. The Central Statistical Office (CSO) just put out its quarterly \u2018Periodic Labour Force Survey\u2019 report, covering the employment landscape in Indian cities between January to March. <\/p>\n\n\n\n

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\u2019s not going up, sure, but it isn\u2019t falling lower either. <\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

But what does our \u2018unemployment rate\u2019 really tell us? It\u2019s a measure of the people that want to work<\/em> but don\u2019t 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\u2019t 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 <\/em>end up with a high unemployment rate. <\/p>\n\n\n\n

So, do more Indians want to work? Or, in boring-speak, has our \u2018Labour Force Participation Rate\u2019 (LFPR) risen? Yes! India\u2019s 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. <\/p>\n\n\n\n

A lot of these new workers are women. See, traditionally, many Indian women have kept away<\/a> (or, quite often, were forced to keep away) from work. We\u2019ve 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%.<\/p>\n\n\n\n

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Behind our stagnant unemployment rate, then, are tens of lakhs <\/em>of new jobs, which are hidden behind an even larger deluge of new workers. <\/p>\n\n\n\n

About 47% of India\u2019s 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. <\/p>\n\n\n\n

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There\u2019s one more layer to this, though: not all jobs are made equal.<\/p>\n\n\n\n

While we certainly have more<\/em> jobs than we did before the COVID-19 pandemic hit, these may be worse in quality. It\u2019s hard to know for sure, though. We only have really crude markers for this. Many people that can\u2019t find themselves a regular, salaried job try to make ends meet by throwing together a small business (remember when pakoras<\/a> 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\u2019ve become self-employed because there\u2019s nothing else for them to do. <\/p>\n\n\n\n

That\u2019s 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\u2019s hard to know for sure<\/em>. <\/p>\n\n\n\n

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Inflation falls marginally<\/strong><\/h3>\n\n\n\n

There are two ways we could talk about April\u2019s 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. <\/p>\n\n\n\n

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. <\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

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\u2019ve gone into why the RBI cares about inflation before<\/a>.) With no real surprises in the data since April, when the MPC last met, chances are that it keeps things exactly how they are. <\/p>\n\n\n\n

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Exports rise, imports rise more<\/strong><\/h3>\n\n\n\n

India\u2019s 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\u2019s the highest it\u2019s been in six months, and a third higher than April last year!<\/p>\n\n\n\n

How did we get here? Well, our exports did alright<\/em>. They were 1% higher than in April, in fact. For a quick breakdown: <\/p>\n\n\n\n