India sees slight rise in unemployment; January rate at 5 per cent

India’s unemployment rate rose marginally to 5 per cent in January 2026, up from 4.8 per cent in December 2025, according to the latest Periodic Labour Force Survey (PLFS) released by the National Statistics Office (NSO).

The Monthly Bulletin noted that the “Unemployment Rate (UR) show a modest increase,” with rural unemployment climbing to 4.2 per cent from 3.9 per cent and urban unemployment rising to 7 per cent from 6.7 per cent in the previous month
. It further stated that the “unemployment rate recorded a marginal increase in January, 2026 compared to December, 2025 in both rural and urban areas.”

At the same time, labour force participation remained broadly stable. The Labour Force Participation Rate (LFPR) for persons aged 15 years and above stood at 55.9 per cent in January, compared with 56.1 per cent in December. Rural LFPR eased slightly to 58.7 per cent, while urban LFPR was largely unchanged at 50.3 per cent.
The release underlined that “LFPR continued at nearly the same level” and that the “urban work force remained unchanged.”

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Employment levels showed minor softening. The Worker Population Ratio (WPR) declined marginally to 53.1 per cent in January. Rural WPR dipped to 56.2 per cent from 56.7 per cent in December, while urban WPR held steady at 46.8 per cent
.
Female labour force participation remained stable at 35.1 per cent. Rural female LFPR was recorded at 39.7 per cent, while urban female LFPR stood at 25.5 per cent, with the report observing that “Female LFPR maintains its level, with marginal variations across rural and urban areas.”

Explaining the January movement, the NSO said the “decline in LFPR and WPR and rise in UR in January 2026 is primarily rural-driven, with seasonal factors, post-harvest slack, and discouragement effects playing a key role.” It added that activities such as construction, agriculture-allied work, transport, and small trade typically slow during winter, while “urban areas remained stable.”

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The January estimates are based on responses from 3,73,158 persons surveyed across rural and urban India