According to the most recent CMIE figures, the unemployment rate rose to 8% in November as job growth remained unequal.

The 30-day moving average unemployment rate has been rising since the middle of November, crossing 8% at the end of the month.

According to different indices, job growth remained unequal, while inflation for industrial employees continued to climb, indicating a potential deterioration of the labour situation. Already, low rural salaries and varied patterns in formal-sector job growth have prompted questions about whether the surge in private spending seen in the fiscal second quarter will continue in the months ahead.

In November, the CMIE all-India unemployment rate rose to 8%, its highest level since August, when it stood at 8.28%. In October, it was 7.77%. In November, urban unemployment rose to 8.96%, while rural unemployment fell to 7.55%. In October, urban unemployment stood at 7.21%, while rural unemployment stood at 8.04%.

The 30-day moving average unemployment rate has been rising since the middle of November, eventually crossing 8% at the end of the month.

Meanwhile, according to the Naukri JobSpeak indicator, hiring activity has restored to pre-festive levels and increased by 27% month on month in November of this year. “While the overall picture appears healthy on a monthly basis due to post-holiday recovery,” it said, “a deeper analysis at the sector level reveals mixed trends compared to the boom times of the first half of this year, which witnessed high growth in hiring activity.” Hiring in sectors such as IT, education, and retail declined.

Meanwhile, retail inflation for industrial employees remained around 6% in October, albeit somewhat lower than in September, according to the Labor Bureau.

Consumer price inflation for industrial employees was 6.08% in October 2022, compared to 6.49% in September and 4.52% the previous year. Food inflation remained high in October, at 6.52%, but somewhat lower than 7.76% in September. In October 2021, food inflation was 2.2%. Retail inflation for industrial employees has been persistently high due to increasing food costs, and has been on an upward trend since August of this year. It passed the 6% level in June 2022, rising to 6.16%.

Analysts have cautioned that fewer formal-sector employment and lower rural salaries might depress spending.

“Enhancing contact-heavy services Despite steady urban consumer demand may remain at a sluggish rate for some time,” Emkay Global Financial said in a report on Q2 GDP numbers, adding that channel inspections reveal mixed demand trends throughout the recent Christmas season.

The sequential dip in new EPFO payrolls and the Naukri Job index suggests that formal sector employment growth is slowing. Furthermore, slower real rural wage growth may have an additional influence on rural consumption,” it stated.

According to Crisil, while domestic demand has remained rather resilient thus far, it will be put to the test next year by declining industrial activity. It goes on to say that increasing the transmission of interest rate rises to consumers would be a pressure point, and that rural income prospects will remain dependent on the vagaries of the weather. “While decreased demand for Mahatma Gandhi National Rural Employment Guarantee Act positions is a promising indicator for the rural economy from a job standpoint, low salaries are a source of concern for rural demand,” the report added.

Private final consumption expenditure contributed positively to second-quarter GDP growth, increasing 9.7% in the period compared to 25.9% the previous quarter.