South Africa’s unemployment rate increased to 25.5% in the second quarter of 2014, Statistics South Africa (Stats SA) announced on Tuesday.
The Quarterly Labour Force Survey (QLFS) showed that unemployment has risen by 0.3% from the 25.2% recorded in the first quarter.
The survey, which polls households, found that the number of unemployed people increased by 87 000 people with the number of unemployed people at 5.2 million. This is the highest number since the inception of the QLFS in 2008.
According to the data between the first quarter and the second quarter, employment increased by 39 000. This was largely due to an increase of 60 000 and 43 000 jobs observed in the private households and in the informal sector respectively.
Employment declined by 39 000 in the Agricultural industry and by 24 000 in the formal sector.
According to the report, the unemployment rate in the second quarter is 4% above the low of 21.5% observed in the fourth quarter of 2008.
In the second quarter, the number of discouraged job-seekers increased by 64 000, while the number of not economically active people decreased by 35 000. This resulted in a net increase of 29 000 in the not economically active group as a whole.
The QLFS describes a discouraged job-seeker as a person who was not employed during the reference period of the survey, who wanted to work, was available to workstart a business but did not take active steps to find work during the last four weeks. This is provided that the main reason given for not seeking work was that of no jobs available in the area unable to find work requiring hisher skills or losing hope of finding any kind of work.
According to economists, the unemployment rate is likely to remain high in the short terms given weak domestic demand, frequent labour disputes and rising input costs, among others.
“The figures provide further evidence that local economic performance is still well below potential. However, the inflation outlook also remains poor in the short term. The MPC [Monetary Policy Committee] raised rates by 0.25% in July in an effort to strike a balance between increasing inflation and a weakening economy.
The MPC reiterated that interest rates are in a rising cycle and that at some point they will have to be ‘normalised’. The implication is that the MPC will continue to talk tough but to act as moderately as possible. The next hike will probably again be 0.25% and will probably be in November,” said Nedbank economists.
Source : SAnews.gov.za