Unemployment on the rise
The official unemployment rate in South Africa rose to 25.5% of the labour force in the third quarter of this year from 24.9% in the second quarter, a survey showed.
In its latest Quarterly Labour Force Survey, Stats SA said today the total number of unemployed people stood at 4.67 million in the three months up to September – the highest total since records started in 2008 – from 4.47 million in the second quarter.
The expanded definition of unemployment, which includes people who have stopped looking for work, increased to 36.3% from 36.2% previously.
The agency attributed the rise to job losses in domestic households and the mining sector, which has been under pressure from a wave of wildcat strikes.
Meganomics economist Colen Garrow said: “I’m not surprised that the number is higher and parts of the sectors in the economy are struggling.
“Mining and manufacturing are going to be shedding jobs even more as the economy slows down and the impact of the strike action takes effect.
“It’s amongst the highest unemployment rates globally and highlights quite strongly that we need to be taking some corrective action.”
Johannes Khosa, a Nedbank economist, said: “It’s worrying that the unemployment rate is rising again. It doesn’t paint a good picture for the months ahead in terms of consumer spending.”
The rand was at R8.66 against the dollar at 8.22am (GMT), from R8.69 before the data was released at 8am (GMT).
The yield on the 2015 bond dipped to 5.485% from 5.49% prior to the release, while that on the 2026 issue eased to 7.705% from 7.73%.
South Africa’s jobless rate has been stuck at around 25% for years, and did not dip appreciably even when the economy was growing strongly in the years leading up to a 2008/09 recession.
The ruling ANC has made employment a top priority, and unveiled a big infrastructure development plan in February that it said should create millions of jobs.
With more than 13 million people unemployed out of a population of about approximately 52 million, economic growth will be hard-pressed to gain momentum as fewer consumers are able to drive growth.
However, Finance Minister Pravin Gordhan has said the economy needs sustained growth of 7% a year – nearly three times the 2.5% forecast for this year – to make a dent in unemployment.
Government is proposing changes to labour laws that are intended to increase job security for temporary workers but economists say this will worsen unemployment as it ramps up costs for employers.