SA’s unemployment rate hits lowest level in three years

South Africa’s unemployment rate continued on its downward path in the third quarter of 2023, easing to 31.9% from 32.6%.

According to data from Statistics South Africa, the country’s official unemployment rate dipped below 32% for the first time since the third quarter of 2020, when the number hit 30.8%. 

The third quarter decline adds to a series of retreats in the country’s ultra-high jobless rate, which in the wake of the Covid-19’s economic onslaught peaked at an eye-watering 35.3% in the fourth quarter of 2021. But the unemployment rate has yet to fall to its pre-pandemic level.

According to the data, South Africa’s economy added 399 000 people to the workforce in the third quarter of 2023 — bringing the number of employed to 16.7 million, surpassing the pre-pandemic level of 16.4 million. Meanwhile the number of unemployed people decreased by 72 000 to 7.8 million during the same quarter. 

The largest employment gains were recorded in the finance industry, which saw a more than 9% quarter-on-quarter bump.

Moreover, the number of people who were economically inactive and discouraged work-seekers also decreased by 160 000 and 26 000 respectively. The unemployment rate according to the expanded definition — which counts people who have given up on the job search — fell to 41.2% from the 42.1% recorded in the second quarter.

A significant decline in the unemployment rate was not widely expected. In fact, Nedbank’s analysts anticipated a higher unemployment rate as a result of load-shedding impact on the economy and the confidence-sapping slow pace of structural reforms.

That said, there is reason to believe that employment gains will remain muted amid anaemic economic growth. The recently tabled medium-term budget policy statement forecasts that the economy will grow at an average rate of only 1.4% between 2024 and 2026, which is hardly enough to make a substantial dent in the country’s unemployment rate.