May 5 (Bloomberg) -- South Africa’s unemployment rate, the highest of 62 countries tracked by Bloomberg, rose in the first quarter as the economy probably entered a recession for the first time in 17 years.

The jobless rate increased to 23.5 percent from 21.9 percent in the previous three months, Statistics South Africa said in a report released in Pretoria today. The number of people out of work rose to 4.18 million from 3.87 million.

“Manufacturing and mining are under strain, and we can expect these numbers to worsen,” said Fanie Joubert, an economist at Efficient Group in Pretoria. “We’re unlikely to see a recovery until the fourth quarter.”

The ruling African National Congress, which won a fourth consecutive five-year mandate in April 22 elections, has pledged to make “decent work opportunities” the focus of its economic policy. The government is aiming to cut the unemployment rate to 14 percent by 2014.

“The monthly indicators that have been released so far show a sharp decline in manufacturing and trade,” Joe de Beer, a senior statistics office official, told reporters. “This is supported by the unemployment data.”

South Africa’s economy, the biggest on the continent, contracted for the first time in a decade in the fourth quarter, shrinking an annualized 1.8 percent, due to a plunge in manufacturing. The central bank estimates a further contraction in the three months through March.

Discouraged Workers

Unemployment rose as 158,000 people lost their jobs and a further 106,000 jobseekers couldn’t find work, the statistics office said. Including people who hadn’t looked for work in the four weeks prior to the survey, referred to as discouraged job seekers, pushed up the jobless rate to 31.2 percent in the first quarter from 29.3 percent in the previous three months.

Manufacturing, which accounts for 16 percent of the economy, lost 62,000 jobs, while the number of people employed in the construction industry fell by 65,000, the statistics office said. The retail and wholesale trade industries lost the most jobs in the quarter, with employment declining by 143,000.

Companies such as ArcelorMittal South Africa Ltd., the continent’s biggest steel producer, and Anglo Platinum Ltd., the world’s largest producer of the metal, have fired thousands of workers in response to declining demand.

The unemployment data is based on a labor force survey of both formal and informal businesses.

To contact the reporters on this story: Nasreen Seria in Johannesburg at nseria@bloomberg.net; Mike Cohen in Cape Town at mcohen21@bloomberg.net

Last Updated: May 5, 2009 06:23 EDT