South Africa's Jobless Rate Highest in at Least Eight Yearsby and
Unemployment rate rose to 26.7% in first quarter from 24.5%
Biggest quarterly decrease in jobs since at least 2010
South Africa’s unemployment rate rose to the highest in at least eight years as factories, wholesalers and retailers cut jobs.
The jobless rate increased to 26.7 percent in the first quarter from 24.5 percent in the previous three months, Statistics South Africa said in a report released on Monday in the capital, Pretoria. The median of four economist estimates compiled by Bloomberg was 25.7 percent. The number of people without jobs rose by 521,000 to 5.71 million and the employed decreased by 355,000 to 15.66 million, the biggest quarterly drop in at least six years, according to the statistics office.
Africa’s most industrialized economy has struggled to increase employment since the 2009 recession and has the highest jobless rate of more than 60 countries tracked by Bloomberg. Falling commodity prices, the worst drought in more than a century and rising wage demands are curbing work opportunities at a time when the nation’s credit rating is at risk of being downgraded to junk.
“Until the economy gets itself on a stronger growth path, the ability of this economy to create a meaningful number of jobs is going to be curtailed,” Jeffrey Schultz, an economist at BNP Paribas Securities, said by phone from Johannesburg on Monday. “Until such time as we get growth stimulating policy initiatives out there and investments in this economy, the outlook for job creation is looking pretty dire.”
Manufacturing shed 100,000 jobs in the first quarter, employment in the trade industry fell by 119,000 and construction jobs decreased by 77,000, the statistics office said. Agriculture and community and social services, which include the government, were the only industries where employment grew.
The economy will probably expand less than 1 percent this year, the slowest pace since the recession, according to government and central bank projections. South Africa needs annual expansion of 7.2 percent from 2018 to achieve the government’s goal of reducing the jobless rate to 6 percent by 2030, the World Bank said in February.
“South Africa has not done enough” to create jobs, Statistician General Pali Lehohla told reporters in Pretoria. “Enough is when you’ll see a change in the trend. At the moment there’s no indications of a turning point and the economic climate is not helping.”
The rand weakened 0.7 percent to 14.9866 per dollar as of 1:40 p.m. in Johannesburg. Yields on rand-denominated government bonds due 2026 fell four basis points to 9.10 percent.