Understanding The Rise In The Unemployment Rate in 2023


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While South Africa’s official unemployment rate climbed during the first three months of the year, jobs are still being created in several economic sectors. The official labour force statistics were released earlier this week.

 


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The official unemployment rate now stands at 32,9% after it increased marginally during the first three months of 2023. This was revealed on Tuesday in the Quarterly Labour Force Survey (QLFS) from Statistics South Africa (StatsSA). 

The QLFS revealed that the number of employed persons in South Africa increased by 258,000 to 16,2 million people in the first quarter of 2023 compared to the previous three months. 

The number of unemployed people grew to 7.9 million during the first three months of the year after 179 000 people became unemployed. 

While loadshedding has a devastating impact on business and productivity, more people started seeking employment in 2023. 

The number of discouraged work-seekers decreased by 87,000 in the first quarter of 2023 compared to the fourth quarter of 2022 resulting in a net decrease of 296,000 in the not economically active population.

Additionally, the number of people who were not economically active for reasons other than discouragement decreased by 209,000 to 13,2 million. 

As a result of the decline in discouraged work-seekers and other economically inactive individuals, there was a net decrease of 296,000 in the not economically active population.

The changes in the employment and unemployment statistics resulted in the official unemployment rate increasing by 0.2 percentage points to 32,9% in the first quarter of 2023. 

The unemployment rate according to the expanded definition decreased by 0.2 percentage points to 42,4%. The expanded definition of unemployment provides a broader perspective by including discouraged workers and potential labour force participants in the statistics. 

Where Jobs Were Gained And Lost

Jobs were gained in several economic sectors. The most jobs were created in the Finance sector, Community and Social Service sector and the agriculture sector. They contributed 184,000 jobs, 175,000 jobs and 27,000 jobs respectively. 

Most of the job losses recorded in the first quarter were in Private Households where 85,000 jobs were lost. Job losses were also recorded in Trade (28 000), Mining (24 000), Construction (11 000) and Manufacturing (2 000).

The provinces of Gauteng, Limpopo, the Western Cape and KwaZulu-Natal accounted for the largest employment increases in 2023. They created 80,000 jobs, 71,000 jobs, 62,000 jobs and 54,000 jobs respectively. 

Employment losses were recorded in Mpumalanga where 45,000 jobs were lost followed by the North West and Free State where 4, 000 each were lost. 

The unemployment rate reflects the state of the job market in the South and gives key insights into the number of people who want to work but cannot find employment, the number of people who do not want to seek work and which economic sectors are impacting the unemployment rate.

 

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