What economists say about SA’s shock jobless data
Private households shed 30,000 jobs, the most of any sector, in the quarter
SA’s inability to absorb its growing labour force has resulted in the worsening of the unemployment rate, with the expanded rate rising to its worst level in a decade.
The unemployment rate rose to 27.5% in the third quarter from 27.2% in the previous quarter this year.
Expanded unemployment, which includes people who have stopped seeking work, rose 0.1 of a percentage point to 37.3%. This is the worst level since the survey commenced in January 2008.
Elize Kruger, an economist at NKC African Economics, said the unemployment remains high by historical and global standards.
The International Labour Organisation (ILO) report, World Employment and Social Outlook 2018, forecasts the global jobless rate to ease to 5.5% this year from 5.6% in 2017, ending three years of rises in unemployment.
In the quarterly labour force survey for the third quarter published on Tuesday, Stats SA said seven out of 10 sectors reported job losses as tepid economic growth suppressed job creation.
The highest job losses were recorded in private households, which shed 30,000 jobs during the quarter. Mining and manufacturing continued to shed employees as well.
The declines were offset by employment gains in finance and other business services, trade and construction, which resulted in a net increase of 92,000 jobs in the third quarter of 2018. SA’s working age population rose by 0.4% or 153 000 during the third quarter compared to the previous quarter. The absorption rate remained unchanged at 43.1%.
Kruger said, “It is increasingly clear that the South African economy is unable to absorb all new entrants to the job market.” She added that the stubbornly high rate elevated the importance of recent government-led initiatives to “focus the attention of all stakeholders on policies to foster economic growth that would lead to more job creation”.
Youth unemployment eased on a quarterly basis to 52.8% from 53.7% in the second quarter.
The number of discouraged job seekers, who are not actively seeking work, fell by 131,000 while the number of other non- economically active persons increased by 65,000, Stats SA said. This resulted in a decrease of 66,000 in the number of people not in the labour force between the second and third quarters of 2018.
Isaac Matshego, an economist at Nedbank, said the drop in employment in the sector, both on a quarterly and an annual basis, could be a reflection of financial pressures faced by private households. “We are going to see a continued effect of higher fuel prices, in particular; the pressure on household incomes is going to remain elevated and that could mean further job cuts in the fourth quarter of this year.”