India unemployment rate dips to 5% in August; rural job market drives improvement

India's unemployment rate for people aged 15 years and above eased marginally to 5% in August from 5.1% in July, government data showed on Tuesday.

The August reading was also lower than the 5.2% unemployment rate forecast by economists in a Reuters poll.

During the month, rural unemployment fell to 4.1% from 4.5% in July, while the urban unemployment rate remained largely stable at 6.8%, compared with 6.7% a month earlier.


Also Read: India's unemployment rate drops to 5.1% in July as job market improves, more women join workforce

On a year-on-year basis, the overall and urban unemployment rates were broadly unchanged in August. The rural unemployment rate, however, declined to 4.1% from 4.3% in August 2025, a fall of 0.2 percentage point.

Female labour force participation rose moderately in August, driven mainly by an increase in rural participation, while urban participation remained broadly stable. Over the past year, the overall female LFPR has also improved, with rural areas accounting for most of the gains.

The overall Labour Force Participation Rate (LFPR) for people aged 15 years and above rose marginally to 55.6% in August from 55.4% in July. Rural LFPR also increased to 58.2% from 58%, while the urban LFPR remained unchanged at 50.4% during the month.

Compared with August 2025, the overall LFPR increased by 0.6 percentage point to 55.6% from 55%. Rural LFPR rose by 1.2 percentage points to 58.2% from 57%, while urban LFPR declined marginally by 0.5 percentage point to 50.4% from 50.9%.