Even with the rise in the unemployment rate, a Finance Ministry report projects positive outlook for the job market.
“Going forward, the outlook for hiring and employment appears steady,” the monthly economic review (MER) prepared by the Economic Affairs Department of the Finance Ministry said. The report has quoted two reports for giving the outlook. First is the the TeamLease Employment Outlook Report which has estimated a net employment growth of 2.8 per cent in H1 (April-September) of FY26. The report states that 47 per cent of employers intend to expand their workforce in H1 FY26, indicating sustained talent acquisition momentum.
The report also emphasises a shift in hiring from quantity expansion to quality expansion with emphasis on skill density, retention over replacement and AI-driven productivity. Sectors such as EV & EV Infra, automotive, e-commerce and tech start-ups are expected to lead this growth, with the highest positive change estimated in workforce size, MER stated. The TeamLease report is based on a survey among 1,263 employers across 23 industries and 20 cities.
Strong hiring sentiment
The second report based on the ManpowerGroup Employment Outlook Survey presents a positive hiring outlook for India, with the labour market maintaining a strong hiring momentum. According to the survey, India has the second strongest hiring sentiment globally, with a net employment outlook (NEO) of 42 per cent for the quarter ending September 2025. The NEO is 18 percentage points higher than the global average 33 and marks a 12-percentage point y-o-y improvement.
Across the sectors, Energy & Utilities emerged as the strongest with a NEO of 50 per cent, followed by Information Technology (46 per cent) and Industrials & Materials (45 per cent).
Further, the Reserve Bank of India’s latest Consumer Confidence Survey, May 2025 round, shows that consumers have an optimistic view of the future employment situation, the ManpowerGroup report said. This survey measures employers’ intentions to increase or decrease the number of employees in their workforce during the upcoming quarter. It interviewed nearly 40,671 employers across 42 countries on hiring intentions for the July-September 2025 quarter. 3,146 employers across India were asked about their third quarter hiring intentions and the reasoning behind their decisions.
The MER used the Naukri JobSpeak May 2025 report to find out about the present scenario. According to the report, the white-collar hiring remained stable, with 0.3 per cent y-o-y growth during the month. The data revealed notable growth in a few key sectors such as AI/ML professionals (+25 per cent y-o-y), Insurance (+6 per cent y-o-y), Real Estate (+5 per cent y-o-y), BPO/ITES (+4 per cent y-o-y), and Hospitality (+4 per cent y-o-y).
Another notable trend observed was that jobs for senior professionals with over 16 years of experience witnessed a 6 per cent increase. “Job creation in India’s manufacturing and services sectors was high, with the PMI Employment sub-index rising to 54.9 for manufacturing and 57.1 for services, their highest level in recent times, indicating strong hiring activity across the manufacturing and services sectors,” MER said.
Unemployment rate
On June 16, the Statistics Ministry reported that the unemployment rate (UR) rose to 5.6 per cent in May as against 5.1 per cent in April. UR is defined as the percentage of individuals unemployed among persons in the labour force.The female UR was a touch higher at 5.8 per cent compared to the male UR of 5.6 per cent at the country level during May, 2025,” the Monthly Bulletin prepared by National Statistics Office (NSO) said.
Further, it emphasised that changes are expected in the monthly PLFS (Periodic Labour Force Survey) ratios due to increased frequency and seasonal changes but do not necessarily reflect secular trends. These would be attributable to a combination of seasonal, academic and labour market-related factors.