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A labor protest in the Northwest.
South Africa cut 2.2 million jobs during the second quarter, according to Statistics South Africa (Stats SA).
While the employment figures reflected the largest drop in employment between the second and first quarters since 2008, Stats SA said Tuesday that unemployment also fell substantially, declining by 2.8 million to 4.3 million. The official employment rate is now 23.3%, compared to 30.1% in the first quarter.
Peter Attard Montalto, an economist at Intellidex, said it is better to trust the expanded definition of unemployment, which would see the rate between 42.6% and 52.7%, which is more realistic.
The expanded definition includes people who were not employed at the time of the survey and who were available for work but who did not seek work because they were discouraged from seeking work or did not seek work for reasons other than discouragement.
Economists had anticipated record unemployment due to poor economic conditions. Nearly 1 million job losses were projected for a single quarter; This coincides with job losses in the 12 months after the global financial crisis, Fin24 previously reported. Investec had forecast an unemployment rate of 37.9%.
The government had implemented a national shutdown in March to curb the spread of Covid-19. During April, only essential goods and services were operational and economic activity was limited with blocking restrictions at its highest level. As a result, GDP contracted by 51%, in quarter-on-quarter, annualized terms. Not annualized, the contraction was 16.4%.
In its September quarterly bulletin, published on Tuesday, the Reserve Bank noted that the lockdown had brought logistical complications for Stats SA, which contributed to the delay in the publication of employment data.
“The number of unemployed South Africans had already increased significantly in the year up to the first quarter of 2020 due to an increase in the number of new and re-entrants to the labor market who were unable to find employment.
“The official unemployment rate rose to a record 30.1% in the first quarter of 2020, reflecting the impact of the economic recession that had already started in the third quarter of 2019,” the bulletin reads.
Stats SA said it had to change the mode of data collection to accommodate Covid-19 security protocols.
“Given the change in the survey collection mode and the fact that the estimates for the second quarter of 2020 are not based on a full sample, comparisons with previous quarters should be made with caution,” said Stats SA.
This is a developing story.
