Some Encouragement from Unemployment Data

New data from Statistics SA show the unemployment rate has improved – falling to 24.7 % in the third quarter from 25.6 % in the second quarter. The labour force increased by 194 000 to 18.6 million, while the number of unemployed people fell by 114 000 to 4.6 million. The number of discouraged work seekers – those who are willing and able to work but are not actively searching for employment – fell by 125 000 to 2.2 million during the quarter. What do our experts make of it?

Mike Schussler from economists.co.za:

We have never ever had this big a growth in employment on a quarterly basis – with over 300 000 jobs, and the yearly growth rate is the highest in over eight years! This certainly does not gel in my thinking with the weaker economy – but we do see high consumer spending, which does support at least some job growth, as the money must come from somewhere.

Dawie Roodt from the Efficient Group:

Better than expected! A few comments: the fall in agricultural jobs is probably directly related to the sharp increase in the minimum wage earlier this year. Compared to a year ago, the number of discouraged work-seekers increased, a real concern – however, on a quarterly basis there was some improvement. And the increase in employment in the service and trade sectors is good – sign of a modern economy. However, we need more jobs for the unskilled, and clearly the economy is not creating enough of those.

Loane Sharp from Adcorp:

During the quarter, 308 000 more people were employed than in the previous quarter, with the formal sector contributing most of these jobs. A further 114 000 people left unemployment, with large numbers of people expressing newfound hope about their prospects of finding work. Most of the new jobs were created in the services sectors, notably retail, finance and government. Most of the new jobs were created in white-collar occupations, notably clerical, administrative and professional staff. Around 54% of new jobs were temporary in nature, reflecting employers’ continuing uncertainty around the durability of the current expansion. According to the report the last quarterly improvement is not a once-off event: employment rose in seven of the last nine quarters, even though economic growth slowed from 4.0% to 1.7% per annum over the same period. Nonetheless, South Africa’s unemployment challenge persists: since 2008 the number of unemployed has increased from 3.9 million to 4.6 million, and at present 31.4% of youth aged between 15 and 24 is in neither education nor employment.

Neren Rau from SACCI:

SACCI welcomes the slight drop in both the official and expanded definition of unemployment. SACCI is hopeful that this trend can be sustained in order to build a more inclusive economy. Policy interventions like the Employment Tax Incentive should help to strengthen this trend provided its scope of application is widened. SACCI remains concerned over ever growing public sector employment. Government employment increased by 120 000 on an annual basis in the third quarter of 2013, the biggest growth item for this period that further entrenches government as the single biggest employer at 3.15 million, followed by retail trade with 3 million. The strong quarterly growth in Construction (100 000) and Finance (92 000) also showed that the private sector has significant appetite for employment creation.

Nedbank Economic Unit:

The rise in formal sector jobs is encouraging. However, this does not reflect a sustained increase in job levels. Subdued economic growth on the back of still weak, although improving, global conditions and lacklustre domestic output growth point towards job creation remaining generally slow in the next few quarters. These numbers, together with the credit demand figures released earlier today, confirm that demand-driven inflation remains subdued. We therefore expect the Reserve Bank to keep interest rates unchanged well into 2014 as it strikes a balance between high cost-push inflation and modest domestic growth.

Tim Harris of the DA:

The Quarterly Labour Force Survey released today indicates that unemployment has become entrenched at more than 35% over the past year. The new jobs created in the third quarter are almost completely neutralised by the increase in the size of the labour force and an increase of 70 000 jobseekers who have given up looking over the period. The report further shows that 3.3 million young South Africans are not in employment, education or training. In total 6.8 million South Africans are unemployed or have given up looking. In 2009, 5.8 million people were unemployed or already gave up looking for work. Today, one million more people are unemployed than at the start of President Zuma’s term in office.

Comment: It is always encouraging to see a fall in unemployment. However, the army of the jobless still has far too many members, and we are not creating jobs fast enough. Wait, too, for the impact of all the above-inflation wage rises which have been awarded recently, leading to more mechanisation and fewer people in our factories and mines.

Tweets of the Day:

Sarcasm (@WorIdComedy): You’re not fat, you’re just.. easier to see.

Azanian (@ntk_999): Cruel Fact. RT~»"@UberFacts: You’re more likely to die on your way to buy a lottery ticket than you are to actually win the lottery."

Puns (@omgthatspunny): I saw a beaver movie last night, it was the best dam movie I’ve ever seen.

Puns (@omgthatspunny): For a while, Houdini used a lot of trap doors in his act, but he was just going through a stage.

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