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Johannesburg - The decrease in the unemployment rate to 24.7% in the third quarter of 2013, from 25.6% in the second quarter, is below market expectations, an economist said on Tuesday.
"Although the unemployment rate declined, meaningful and sustained job creation that brings unemployment down to single digits will remain restricted," said Investec economist Kamilla Kaplan.
"Expanding the definition of unemployment to include those individuals who desire employment regardless of whether they were actively seeking work at the time the survey was conducted, yields a substantially higher unemployment rate of 35.6%."
Kaplan said weak economic growth prospects, labour market inefficiencies, and an insufficient rate of small business formation all contributed to the restriction.
Stats SA announced on Tuesday that the unemployment rate dropped to 24.7% in the third quarter of 2013.
"The number of employed persons increased by 308 000, while the number of unemployed persons decreased by 114 000," Stats SA said in its Quarterly Labour Force Survey released in Pretoria.
"This resulted in an increase of 194 000 in the labour force. Compared to a year ago, employment increased by 2.8% (383 000) and unemployment decreased by 1.2% (58 000)."
The report presents the findings from July to September 2013. In the same period last year the unemployment rate was 25.5%.
Kaplan said the decrease in youth unemployment to 49.9% could hardly be considered an improvement because this group remained unable to find work.
Mixed reaction
The announcement was met with mixed reaction from business and political parties.
The SA Chamber of Commerce and Industry (Sacci) welcomed the slight drop, but said it was concerned about the growth in public sector employment.
"Sacci is hopeful that this trend can be sustained in order to build a more inclusive economy," Sacci CEO Neren Rau said in a statement.
"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 three million."
Rau said the strong quarterly growth in construction (100 000) and finance (92 000) showed the private sector had a significant appetite for employment creation.
The African National Congress welcomed the drop in the unemployment rate, saying it meant that more than 100 000 people and their households were better off at present than a few months ago.
"Whilst we commend the drop in the number of people who are unemployed and South Africa’s unemployment rate returns to pre-recession levels, much more still needs to be done to take greater numbers of our people out of the debilitating effects of poverty," spokesman Jackson Mthembu said in a statement.
He said the National Development Plan would commit the ruling party to creating an economy that would create more jobs and ensure greater equity in the sharing of its growth.
Almost completely neutralised
The Democratic Alliance said the number of new jobs created was almost completely neutralised by the increase in the size of the labour force and the increase in the number of job seekers who had given up looking for work.
"In total, 6.8m South Africans are unemployed or have given up looking. In 2009, 5.8m people were unemployed or already gave up looking for work," DA finance spokesman Tim Harris said in a statement.
"Today, one million more people are unemployed than at the start of President [Jacob] Zuma’s term in office."
The Congress of SA Trade Unions welcomed the drop in the employment rate.
"It is still early to celebrate as unemployment is still very high. Such a level of unemployment is not just a personal and family disaster, but a national catastrophe," said Vusumuzi Bhengu, who edits Cosatu's publication, Shopsteward.
"Such high unemployment rates aggravate all the social problems which we see more and more - violent community protests, crime, corruption, xenophobia and the collapse of social and moral values."
Bhengu said Cosatu believed that enough sustainable jobs would be created only once the government implemented the Industrial Policy Action Plan and the Infrastructure Development Plan.
