Unemployment rate hits 2008 levels – 29%

By Prinesha Naidoo and Amogelang Mbatha

(Bloomberg) – South Africa’s unemployment rate rose to the highest level in at least 11 years in the second quarter as mining and finance shed jobs and more people were looking for employment.

The unemployment rate increased to 29% from 27.6% in the three months through March, Statistics South Africa said in a report released Tuesday in the capital Pretoria. The median estimate of three economists in a Bloomberg survey was 27.7%.

Key insights:

  • The working-age population increased by 150,000 in the quarter and the number of discouraged work seekers decreased, which means more people were counted as officially unemployed.
  • The statistics office says the jobless rate is the highest since 2008, when the current data series started.
  • The jobless rate in Africa’s most-industrialised economy has remained above 20% for at least two decades, largely due to insufficient economic growth. Gross domestic product, which hasn’t expanded by more than 2% a year since 2013, must grow by more than 5% annually to boost job creation, according to the government’s National Development Plan, an economic blueprint first presented in 2012.
  • A 25% increase in business liquidations in the second quarter compared with the same period a year earlier may have added to the jobless rate.
  • At 42,000 transport cut the most jobs followed by mining, which lose 36,000 posts.