Unemployment eases to 24.1%

Youth Employment Index

South Africa’s unemployment eased to 24.1% in the fourth quarter of 2013 from a revised 24.5% in the third quarter, Statistics South Africa (Stats SA) said on Tuesday.

Releasing its Quarterly Labour Force Survey, Stats SA said employment increased by 141 000, largely due to an increase of 123 000 jobs in the informal sector and 64 000 jobs in the formal sector.

“In addition, most of the increase was among people with temporary and short-term contracts. Despite the rise in employment numbers, the proportion of working-age South Africans with jobs at 43.3% is still below the pre-recession peak of 46.2% observed in quarter 4 of 2008,” said Stats SA.

Informal non-agricultural sector jobs increased by 123 000 over the fourth quarter, while formal sector non-agricultural jobs increased by 64 000. Over the course of the quarter the agricultural sector and private households shed 27 000 and 20 000 jobs.

The number of unemployed people decreased by 50 000 over the period, while the labour force increased by 91 000.

“The unemployment rate is unlikely to be reduced significantly in the short term given weak domestic demand, rising input costs, labour disputes, significant infrastructure constraints and other regulatory issues in some of the key sectors,” said Nedbank economists of the data.

The figures suggest that the country’s weak economy is still struggling to reduce the unemployment rate significantly, noted the economists.

“The growth outlook is still fragile. At the same time, recent other indicators suggest that inflation is still contained, but the outlook has deteriorated due to the weaker rand. In order to contain the inflationary pressures, we anticipate that the Reserve Bank will raise rates once more in March before keeping them on hold well into 2015,” said Nedbank in a research note.

The Reserve bank raised the repo rate by 50 basis points in January to 5.5% in January.

The survey is a household based sample survey conducted by Stats SA. It collects data on the labour market activities of individuals aged 15 and above who live in South Africa. – SAnews.gov.za

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