(Bloomberg) -- South Africa’s unemployment rate unexpectedly rose in the second quarter to the highest level since 2022, driven by job losses in the trade and agriculture sectors.
The unemployment rate advanced to 33.5% in the three months through June compared with 32.9% in the previous quarter, data released by Statistics South Africa in the capital, Pretoria showed on Tuesday. The median estimate of three economists surveyed by Bloomberg was for the jobless rate to tick down to 31.8%.
The number of people employed fell by 92,000 to 16.7 million.
The jobless rate rose despite a significant improvement in the performance of state-owned power utility Eskom Holdings SOC Ltd., which did not have to ration electricity at all during the quarter.
Planned power outages, known locally as loadshedding, have constrained South Africa’s economic growth and job creation for more than a decade. But since late March Eskom has managed to keep the lights on thanks to improved maintenance of its power plants.
With 8.4 million unemployed, South Africa’s jobless rate remains one of the highest in the world. That’s a major challenge for the country’s new governing alliance, formed after May 29 elections in which the African National Congress lost its majority for the first time since 1994.
The so-called government of national unity, which joins the ANC and centrist Democratic Alliance, plus a number of smaller parties, has pledged to prioritize job creation and economic reform to boost growth, which has averaged a meager 1% for the last decade.
“All employment sectors decreased between the first quarter and the second quarter of 2024 except the informal sector, that increased by 48,000 jobs,” said Statistician General Risenga Maluleke.
He also noted that the widening gap between the labor force participation rate and the absorption rate, “means that the number of jobs that are being created are not able to deal with the issue of unemployment.”
The labor force participation rate, or the share of the working-age population working or actively looking for a job, shrank by a 10th of a percentage point to 60.6%, while the employment-to-population ratio slipped to 40.3% from 40.7% in the previous quarter.
Retail Suffering
Employment in the trade industry fell by 111,000 in the second quarter, with most job losses coming from the hotel and restaurant and wholesale trade sectors, said Solly Molayi, acting deputy director general for population and social statistics. The number of workers in agriculture was down by 45,000.
Most jobs were added in manufacturing, where there were 49,000 new workers, and community and social services which added 36,000.
Overall, the number of discouraged work-seekers increased by 147,000 to 3.2 million.
That contributed to the expanded definition of the unemployment rate, which includes people who were available for work but not looking for a job, rising to 42.6%, compared with 41.9% in the March quarter.
--With assistance from Simbarashe Gumbo.
(Updates with quote from Statistician General in paragraph eight)
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