Covid puzzles: Jobs back, labour shrinks, demand low but inflation still high -Aanchal Magazine and Anil Sasi

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published Published on Oct 20, 2020   modified Modified on Oct 20, 2020

-The Indian Express

While much of the world is seeing benign inflation trends, India is a clear exception. Among the drivers of headline inflation in India in recent months has been food prices, especially those of vegetables.

With economic activity picking pace after the easing of lockdown measures, the recovery has thrown up some paradoxes: revival in employment amid a fall in labour force participation, surging inflation rate despite disinflationary impact from weak demand, and improvement in future outlook surveys even as the situation worsens in households.

In September, as lockdowns were progressively eased, an unusual labour market phenomenon was observed in India — while several workers got jobs, many who did not went on to leave the labour force, data collated by the Centre for Monitoring Indian Economy (CMIE) showed. Typically, when more people find jobs, as had happened during September, a greater number should have come in looking for jobs. The reverse seems to have happened, the CMIE estimates suggest.

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The Indian Express, 20 October, 2020, https://indianexpress.com/article/india/covid-19-coronavirus-economy-inflation-unemployment-migrant-labour-6795031/


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