May 6 (Bloomberg) -- South Africa’s unemployment rate climbed to 25.2 percent in the first quarter as the labor force expanded and the retail, finance and construction industries shed jobs, offsetting gains in agriculture and manufacturing.
The jobless rate increased from 24.9 percent in the previous three months, Statistics South Africa said in a report released today in Johannesburg. The number of unemployed people rose by 100,000 to 4.6 million, while the ranks of those too discouraged to seek work swelled by 73,000 to 2.3 million.
President Jacob Zuma has set a goal to reduce the unemployment rate in Africa’s biggest economy to 14 percent by 2020. Economic growth will probably reach 2.6 percent this year, less than half the 7 percent pace the government estimates it needs to meet the jobs pledge.
“The latest labor force survey reading is very disappointing,” Kevin Lings, an economist at Stanlib Asset Management in Johannesburg, said in e-mailed comments. Unemployment “clearly contributes to much of the social tension and anguish experienced in South Africa on a daily basis. Increasing employment in South Africa has to be the No. 1 economic, political and social objective.”
The Reserve Bank has refrained from lowering borrowing costs to spur job creation and promote borrowing as inflation remains near the top of its target of 3 percent to 6 percent. Credit demand increased at the slowest pace in about a year in March as consumer confidence waned.
The median estimate in a Bloomberg survey of four economists was for the unemployment rate to reach 25.1 percent in the first quarter.
The number of people with jobs rose by 44,000 to 13.6 million in the first quarter, with agriculture adding 54,000 posts, community and social services 44,000 and manufacturing 23,000, the statistics agency said.
The number of people employed in retail and trade slumped 66,000 to 2.86 million, while the number of jobs in the construction industry fell by 41,000 to 1.02 million, the statistics agency said. Employment in finance and other businesses declined 23,000 to 1.78 million.
The rand traded at 8.9804 per dollar at 12:40 p.m., down from 8.9541 before the release of the data.
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