South African Unemployment Drops as More Give Up on JobsAndres R. Martinez
South Africa’s unemployment rate, the highest of 39 emerging markets tracked by Bloomberg, fell the most in four years as more people gave up on seeking work.
The jobless rate declined to 24.9 percent from 25.5 percent in the previous three months, Statistics South Africa said in a report released today in Pretoria, the capital. The number of people without jobs declined by 166,000 to 4.5 million. Those who hadn’t actively looked for work in the four weeks before the survey and aren’t included as unemployed climbed 87,000 to 2.3 million in the quarter.
South Africa’s jobless rate may rise in 2013 as mining companies, including Anglo American Platinum Ltd., finalize plans to lay off workers after strikes last year reduced output and pay increases raised costs. Strikes in the mining, transport and farming industries have curbed exports and growth in Africa’s biggest economy, undermining a government pledge to reduce the unemployment rate to 14 percent by 2020.
“We have seen fewer of the working age population engaged in the labor market,” Kefiloe Masiteng, deputy director general of the statistics agency, told reporters in Pretoria today.
Gross domestic product is expanding at less than half the pace of 7 percent the government estimates it needs to meet its jobs target. The South African Reserve Bank last month cut its estimate for economic growth this year to 2.6 percent from 2.9 percent. The bank has kept the benchmark interest rate unchanged at 5 percent since a surprise cut in July.
“Although the reduction in the unemployment rate is good news, it mainly reflects the large number of discouraged work seekers,” Dennis Dykes, chief economist at Nedbank Group Ltd. in Johannesburg, said in an e-mailed note to clients. “The unemployment rate is likely to remain high in the short term, but the exact extent will at times be masked by the high number of discouraged job seekers.”
The retail and trade industry lost the most jobs last quarter, with employment dropping by 18,000, the statistics agency said. Manufacturing, which makes up 15 percent of the economy, added 3,000 jobs, while employment in mining rose by 8,000. Agriculture added 24,000 jobs, construction rose by 15,000 and transport fell 18,000.
Gold and platinum mines lost more than 10 billion rand ($1.1 billion) in production because of strikes last year, reducing the economic growth rate by 0.5 percentage point, according to the National Treasury.
The rand gained 0.5 percent to 8.8746 per dollar at 2:35 p.m. in Johannesburg.