Chief Economist at Econometrix Azar Jamine says the marginal increase in the rate of unemployment points to the resilience of the South African economy despite the high levels of load shedding.
His comments come as the latest data released by Statistics South Africa indicates that the rate of unemployment rose by 0.2 percentage points from 32.7 percent in the fourth quarter of 2022, to 32.9 percent in the first quarter of 2023.
However, the numbers show that according to the expanded definition, which includes those discouraged from seeking work, unemployment decreased by 0.2 percentage points to 42.4 percent.
Both the formal and informal sectors recorded increases in employment of 209 000 and 107 000 respectively.
Jamine explains, “We did see a significant increase in employment at a time when one had expected possibly a small rate of increase in employment because the first quarter of any year is characterised by a lot of jobs that are created in the fourth quarter during Christmas season and in the hospitality industry and in the agricultural sector, the needs for those jobs fall away in the first quarter. So, under the circumstances employment was encouragingly higher in the formal and informal sector in the first quarter. The problem is the number of school leavers or new entrants to the labour market increased massively and that meant that even though jobs were created they weren’t able to keep pace with the number of new entrants into the labour market.”
However, young people remain vulnerable in the labour market with the first quarter results of the year showing that the total number of unemployed youth aged 15 to 34 years increased by 1.1 percentage point to 46.5 percent.
Stats SA data shows that the official unemployment rate increased by 0.2 of a percentage point to 32.99 percent in the first quarter of this year.
Investec Economist, Lara Hodes says, “The youth category which comprises those 15 – 34 years remains the most afflicted segment of the economy. Unemployment remains critically high in this grouping, improving the quality of and access to education remains critical in this regard. In the short term, we don’t see unemployment improving meaningfully. Indeed the accelerated implementation of key reforms by government is essential to boost confidence, and accordingly growth and job creation.”