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Unemployment Rate : Unemployment rate at 5% in January 2026; Surge up to 10% in urban areas

A slight increase in the country's unemployment rate was recorded in January 2026, with the national average rising from 4.8% to 5%.

Varsha Bhasmare

There has been a slight increase in the unemployment rate in the country in January 2026, with the national average rising from 4.8 percent to 5 percent. This information has emerged in the Periodic Labour Force Survey (PLFS) report released by the National Statistical Office (NSO). According to the NSO, this increase is not due to any structural weakness but is caused by seasonal factors. During the winter, operations in sectors like construction, transportation, and small businesses slow down. As a result, some workers temporarily stop the process of seeking work, which is reflected in the unemployment rate.

Particularly in urban areas, the situation has appeared more severe. The urban unemployment rate, which was 6.7% in December 2025, has directly reached 10% in January. In rural areas, an increase of about 1.1% has also been recorded. The worker population ratio (WPR) in rural areas has fallen to 56.2% in January.

In terms of gender, while the unemployment rate among men has remained stable, there has been an increase in unemployment among women. However, the NSO has clarified that this increase is within the normal range for the period from April to December 2025 and should be viewed as a short-term fluctuation. The rising unemployment in urban areas is a matter of concern for the economy. The slowdown in private sector recruitment, cost-cutting in startups, and seasonal factors are believed to be the combined reasons behind this increase.

Meanwhile, the government faces a major challenge of increasing job creation. Experts are emphasizing the need to focus on measures such as skill development, investment in infrastructure, and promoting small industries. Overall, although the rise in the unemployment rate in January 2026 is temporary, the 10% surge in urban areas is considered a warning for policymakers. Everyone is watching to see if the situation improves after the seasonal factors decrease in the coming months.

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