The uncertainity created by job losses in urban areas due to the COVID-19 related lockdown has crushed the confidence levels of the city dwellers. Many urban consumers are worried about their job prospects and income levels and are therefore reporting sharp cuts even in essential spending.
Lost jobs
The chart plots the change in urban unemployment rate (UR) against the change in urban labour participation rate (LPR, employed plus those searching for jobs) as on June 30 compared to Feb. 29 this year. Despite relaxations in lockdown, urban unemployment rate increased in 13 States. More worryingly, urban labour participation rate has gone down in 19 States in this period.
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Confidence crashes
The graphs depict the answers given by consumers in a survey conducted by the RBI in 13 cities about the present state (blue) of their economic situation and the future prospects (red). Pessimism about the economy have surged to high levels across all indicators in the latest round conducted between May 5 and 17.
The graphs plot the percentage of respondents who gave a particular reply:
Source: Centre for Monitoring Indian Economy, Reserve Bank of India
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