Unemployment in SA rises to 27.5%

The unemployment rate has accelerated to 27.5% in the third quarter from 27.2% in the second quarter of 2018, according to the quarterly labour force survey released on Tuesday.

This is marginally higher than the forecast 27.4% for third quarter.

The economy then slipped into a recession in the second quarter.

There are now 16.4million employed people and 6.2-million unemployed.

The industries that recorded larger declines in employment were private households, mining and manufacturing.

The declines were offset by employment gains in finance and other business services, which created 102,000 new jobs, and trade and construction.

Employment gains were recorded in seven of the nine provinces, with the Eastern Cape and Free State the only provinces recording employment losses.

The expanded unemployment rate, which includes discouraged work seekers, rose by 0.1 percentage point to 37.3%. In the second quarter the rate was 37.2%.

The youth unemployment rate in the 15-24 age group declined 0.8% to 52.8%, quarter on quarter. The informal sector recorded employment gains of 188,000.

Statistician-general Risenga Maluleke said: “Regardless of the level of education, young people aged 15-24 years remain vulnerable.”

Ahead of the survey announcement, Investec forecast that the unemployment rate would rise to 27.4%.

Investec economist Lara Hodes said: “A notable uptick in investment, which would ultimately lift business confidence and potential GDP growth is required to enhance employment rates.”

The national treasury and Reserve Bank forecast GDP growth of 0.7% for 2018 against the IMF downward revised expectation of 0.8%.

Higher rates of unemployment have constrained the willingness of consumers and their ability to spend. This was reflected in still weak private sector credit extension data for September that was published on Monday.