Formal Job Creation Grows For Third Consecutive Month, Hits Nine Month High In June: EPFO

The number of fresh formal jobs created in June showed a steady increase for the third consecutive month, reaching a nine-month high.

This positive trend indicates a sustained recovery in the labour markets during the first quarter of FY24.

The Employees' Provident Fund Organisation (EPFO) released the latest payroll data on Friday (18 August), confirming these findings.

In June, the number of new monthly subscribers to the employees' provident fund (EPF) rose by almost 10 per cent, reaching 10.14 million.

This is a significant increase from the 927,703 subscribers recorded in May. It is worth noting that the EPF had previously registered 10.15 million new subscribers in September 2022.

Among the 10.14 million new subscribers, the proportion of young subscribers aged 18-28 increased to 67.8 per cent in June, compared to 66.5 per cent in May.

This demographic is particularly important as it represents individuals entering the labor market for the first time. The higher percentage of young subscribers indicates the robustness of the labor market for this age group.

Furthermore, the share of women securing employment in new jobs also saw an increase, rising to 27.7 per cent in June from 24.9 percent in the previous month. This upward trend highlights the growing opportunities for women in the labor market.

In June, the net payroll addition, which takes into account new subscribers, exits, and returning subscribers, increased by 28.9% to 1.78 million compared to 1.38 million in May.

However, it is important to note that these monthly payroll numbers are provisional and subject to revision the following month. Therefore, the new EPF subscriber figure is considered more reliable than net additions.

An analysis of net payroll data by state reveals that the highest increase in members occurred in Maharashtra, Tamil Nadu, Karnataka, Gujarat, and Haryana.

These five states accounted for approximately 60.40 percent of the net member addition, with a total of 10.80 lakh members added during the month, according to the labour ministry.

The EPFO releases monthly data as part of the government's ongoing effort to monitor formal-sector employment using payrolls as a metric.

Since April 2018, the National Statistical Office has been publishing employment-related statistics in the formal sector, covering the period from September 2017 onwards.

This data relies on information from schemes such as the Employees' Provident Fund Scheme, Employees' State Insurance Scheme, and the National Pension System.