Unemployment rate slightly higher, but embattled SA is still creating jobs

The official unemployment rate increased by 0.2 of a percentage point to 32.9% in the first quarter of 2023, from the fourth quarter of last year, Statistics SA reported on Tuesday.

 

The number of unemployed people increased by 179 000 to 7.9 million, the Quarterly Labour Force Survey (QLFS) shows.

 

The agency noted that prior to the national lockdown, unemployment had always increased in the first quarter of each year since the survey’s inception. This is due to school leavers and students entering the market. This year, the workforce grew by 437 000 people, with some 232 000 learners and students entering the market. The youth unemployment rate increasing by 1.1 percentage points to 46.5% in the first quarter.

 

The unemployment number also increased because previously discouraged work-seekers are now trying to find jobs, Nedbank’s economic unit said in a note. They are now classified as “unemployed” instead of “not economically active”.

 

Overall, the number of employed persons increased by 258 000 to 16.2 million in the first quarter of 2023, compared to the fourth quarter of 2022.

 

“The employment recovery has been sustained with 1 910 271 cumulative net employment gains over the past six quarters,” noted Thanda Sithole, FNB senior economist.

 

Total employment is still below pre-Covid levels, but it is at least trending upwards, Nedbank added.

 

Both the formal and informal sectors recorded increases in employment of 209 000 and 107 000, respectively. Finance, community and social services, and agriculture created the most jobs. But there were fewer positions in private households as well as small decreases in trade, mining, construction and manufacturing.

 

 

 

Compared to a year ago, 1.3 million more people were employed. There was a net gain of 1 million jobs in the formal sector.

 

The unemployment rate, according to the expanded definition – which includes people who were available for work but not looking for a job – decreased by 0.2 of a percentage point to 42.4%.

 

Youth unemployment remains critically high, according to Lara Hodes, economist at Investec Bank.

 

“Improving the quality of and access to education remains essential,” said Hodes.

 

 

 

Some 3.7 million young people aged 15 to 24 years who were not in employment, education or training (NEET).

 

 

So far in 2023, South Africa suffered more load shedding than during the entire 2022. This – along with aggressive interest rate hikes and rocketing food prices – has weighed on the economy and inhibited job creation.

 

 

Following an economic contraction in the final quarter of 2022, South Africa may have entered a recession if that trend continued in the first quarter of the year.

 

But the country is expected to narrowly miss a recession, according to economists’ forecasts. Their median estimate is for growth of 0.2% in the first quarter, according to a Bloomberg poll.

 

The article has been corrected to confirm that the increase in unemployment was linked to a growing workforce, and not due to a technicality in the survey. The Neet rate was also corrected.

 

Source: News24 – Helena Wasserman

 

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