South African Jobs Growth Slows; Lead Indicator Weakens as Economy Slows
South African employment growth slowed and the central bank’s gauge for economic outlook dropped, signaling interest rates may stay unchanged this week to help stimulate a sagging economy.
Employment in formal, non-agricultural industries rose 7,000, or 0.1 percent, to 8.3 million from the first three months of the year, Pretoria-based Statistics South Africa said on its website today. Employers added 0.6 percent more jobs in the first quarter. The data is based on a survey of companies registered to pay taxes.
The leading indicator, which measures a range of data including job advertisements and manufacturing orders to gauge the economic outlook, fell to 134.3 in July from a revised 135.5 in June, the Reserve Bank said today.
“We are definitely going through a soft patch of domestic data,” said Jeffrey Schultz, an analyst at Absa Group Ltd. “A slower GDP trajectory for 2011 and 2012 is a likely outcome.”
South Africa is struggling to slash its jobless rate as economic growth slowed to an annualized 1.3 percent in the second quarter, while inflation quickened to 5.3 percent in July, the highest in more than a year. Its unemployment rate climbed to 25.7 percent in the three months through June.
The Reserve Bank will likely hold the lending rate at 5.5 percent on Sept. 22 as the debt crisis in Europe and the global slowdown threaten to derail the recovery, according to 18 of 19 economists surveyed by Bloomberg. Europe buys about a third of South Africa’s manufactured goods.
Employment increased by 164,000, or 2 percent, in the second quarter from a year earlier, the statistics office said.
To contact the reporter on this story: Andres R. Martinez in Johannesburg at amartinez28@bloomberg.net
To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net
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