Unemployed graduates vent their frustration outside East London City Hall. Picture: ALAN EASON/DAILY DISPATCH
Unemployed graduates vent their frustration outside East London City Hall. Picture: ALAN EASON/DAILY DISPATCH

SA’s unemployment rate was unchanged at 26.7% in the first quarter of 2018 — confounding expectations for a slight deterioration.

Tuesday’s outcome is a little better than the 26.9% forecast both by Investec and in the Bloomberg consensus.

It is also the second time in a row that the headline rate has come in better than expected : there was a surprise decline of a full percentage point in the September-December quarter, from the historical high of 27.7%, where it spent the first three quarters of 2017.

The economy added 206,000 jobs during the first quarter, Statistics SA said in the Quarterly Labour Force Survey (QLFS), released on Tuesday.

That was driven by increases in six of the 10 industries, with a 95,000-job increase in community and social services, 58,000 in the manufacturing sector and 40,000 in construction.

Statistician-general Risenga Maluleke said: “The less educated are more likely to be unemployed.”

Declines were seen in transport (41,000), mining (14,000), utilities (6,000) and agriculture (3,000).

While the fourth quarter traditionally brings an improvement as businesses hire for the year-end festive season, which is usually reversed in the first quarter, the year-end surprise was also partly a result of fewer people looking for work. The headline improvement hid the fact that both employment and unemployment increased in that quarter.

Unemployment has worsened significantly since the recession of 2008-09, when it averaged 23%-24%.

Labour force dynamics

New labour market participants generally enter the market in the first quarter, BNP Paribas economist Jeff Schultz said ahead of the QLFS release.

However, slow economic growth makes labour absorption difficult.

Nonetheless, the absorption rate improved by 0.4 percentage points to 43.5%.

Statistics SA said on Tuesday that 68.5% of unemployed people still actively seeking work had been looking for employment for a year or more.

The expanded unemployment rate, which includes discouraged workers and economically inactive citizens, grew by 0.4 percentage points to 36.7%.

The number of discouraged workers increased by 249,000 while the number of economically inactive citizens decreased by 403,000.

“The unemployment rate among the youth is higher, irrespective of education levels,” Maluleke said.

The unemployment rate of people between the ages of 15-24 years is 52.4%, with an absorption rate of 12.2%.

Of the 10.3-million people in this age bracket, 32.4% were not employed, or in education or training.

Business Day