Unemployment rate reached record high in third quarter
SA s unemployment rate reached a record high of 30.8% in the third quarter of the year, as the after-effects of the coronavirus pandemic and continued to through the economy.
The increase was expected and comes after a dramatic drop in the jobless rate to 23.3% in lockdown filter the second quarter, due to a technicality that disqualified a large number of the labour force from being defined as unemployed because they could not actively seek work during the lockdown. The people were classed as not economicallyactive“(NEA) during the period.
The country's expanded definition of employment which — includes discouraged work seekers who have given up looking for jobs — rose to 43.1%, up from the second quarter's 42% according to Stats SA's quarterly labour force survey (QLFS), released on Thursday.
With the reopening of the economy there was a large shift of people out of the NEA category. This resulted in a rise in the number of employed people by 543,000 to reach 14.7-million in quarter two, as well as a large leap in the number of unemployed people — which reached 6.5-million, a 2.2-million increase from the previous three months.
The movement of people out of the NEA category was largely towards the unemployed category, rather than into employed, resulting in the significant increase in the unemployment rate, according to statistician-Risenga Maluleke.
The increase to 30.8% was slightly lower than market expectations, with the median forecast by a Bloomberg poll of seven economists coming in at 31%. This headline number, however, remains the highest level on record, Maluleke said at media briefing in Pretoria.
The previous high was in the first quarter of 2020, before the Covid-19 crisis hit SA, when unemployment reached 30.1%.
The figures follow an announcement from President Cyril Ramaphosa on Wednesday that the national state of disaster will be extended by a further month, to December 15. He cautioned the country to prevent a resurgence of the coronavirus, ahead of the festive season. As part of measures to support the economy, Ramaphosa said that unemployment support in the form of the Unemployment Insurance Fund's (UIF) Temporary Employer/ Relief Scheme (Ters) — which has already paid out R53bn to more than 4.7million workers — will be extended by a further month.
He also announced that SA will open borders to all countries and permit the return of normal liquor sales.
SA went into a hard, level 5 lockdown in late March, which brought economic activity to a near standstill. Though it has moved progressively to the current level 1, the economy shrank 51% in the second quarter on a seasonally adjusted and annualised basis.
Stats SA again cautioned that, due to lockdown restrictions, it continues to face data collection challenges, with interviews of survey participants being conducted telephonically during the period. This means that data could not be collected from all the households in the sample, only those with contact numbers.
The increase was expected and comes after dramatic a drop the in jobless rate to 23.3% in the second quarter, due to a technicality