Unemployment in SA hits a 14-year high

South Africa’s unemployment rose to its highest in 14 years in the first quarter as agriculture and informal sectors shed jobs and more people stopped looking for work, data showed yesterday, in a sign the economy may be headed for recession.

The unemployment rate climbed to 27.7% of the labour force in the first quarter, the highest since September 2003, from 26.5% in the last quarter of 2016.

The expanded definition of unemployment, which includes people who have stopped looking for work, rose to 36.4%, or 9.3 million people, out of a total workforce of 22.4 million.

Statistics South Africa warned that recent credit downgrades to sub-investment grade and the threat of further cuts were taking its toll on the economy as the currency depreciated and made imports more expensive.

“Certainly, you are better off without a downgrade than you are with one,” said Statistician-General Pali Lehohla. “The depreciation of the currency works for you when it is deliberate.”

The statistics department said half a million jobs were lost in the quarter, with agriculture sector shedding 44 000 jobs and 14 000 lost in the informal sector.

South Africa’s economy shrank 0.3% in the last quarter of 2016 and if it shows a contraction when domestic product results are released on Tuesday, the continent’s most industrialised economy will be in technical recession. – Reuters