Unemployment rate falls to 24.7 percent

2013-10-29 12:12

South Africa’s unemployment rate fell last quarter to 24.7% as the retail trade and finance industries added jobs in the continent’s largest economy.

The jobless rate decreased from 25.6% in the previous three months, Stats SA said in a report released in Pretoria today. The number of people without jobs fell by 114 000 to 4.6 million. The median estimate in a Bloomberg survey of five economists was for the unemployment rate to stay unchanged at 25.6%.

South Africa needs annual economic expansion of 5.4% to reach a target of cutting unemployment to 14% by 2020 and to 6% by 2030, according to the government’s National Development Plan. Growth will probably slow to 2.1% this year, the National Treasury said last week. South Africa has the third-highest jobless rate among 60 countries monitored by Bloomberg.

“The prospects for meaningful job creation are limited,” Kamilla Kaplan, an economist at Investec, said in a emailed note to clients before the data were released. “The scope for job creation in the public sector is also restricted amid efforts to curtail the expansion of the wage bill.”

The government will keep staff numbers constant for the next three years to help limit state wages, Finance Minister Pravin Gordhan in his mid-term budget statement on October 23. Gordhan introduced a bill in Parliament a day later to subsidise wages for new entrants to the labour market.

Peter Buwembo, executive manager for labour statistics at Stats SA, told reporters: “Employment levels at 14 million in the third quarter are now similar to the pre-recession levels in the fourth quarter of 2008.”

While inflation decelerated to 6% in September, it remains at the top of the Reserve Bank’s 3% to 6% target range, limiting options for policy makers to cut the benchmark interest rate to boost growth and job creation.

The unemployment rate is compiled from a household survey covering the formal and informal industries.

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