Unemployment rate declines in fourth quarter

"Unemployment declined by 166 000 to 4.5 million in the fourth quarter of 2012, resulting in the unemployment rate declining to 24.9% from 25.5% in the previous quarter," Stats SA's Deputy Director General Kefiloe Masiteng said on Tuesday, 5 February 2013.

She was speaking at the release of the results of the Quarterly Labour Force Survey (QLFS) - a household-based survey initiated in 2008 - for the fourth quarter of 2012.

The expanded definition of unemployment - which includes people who have stopped looking for work - was at 35.9% in the fourth quarter, down from 36.3% in the third quarter of 2012.

It is was also the first time since the inception of the QLFS that there was a decrease in employment in the fourth quarter of a year, with a decline in private households, trade and transport industries having contributed most to the loss of employment.

In the fourth quarter, about 4.5 million people were looking for work, of which 3.1 million have been looking for work for a year or longer. Of those looking for work, 61.3% did not have matric.

Stats SA would not speculate on whether the newly announced minimum wage for farmworkers would lead to job cuts.

Labour Minister Mildred Oliphant announced on Monday that the new minimum wage for farmworkers for the next three years has been pegged at R105 per day. The new wage determination will be effective from 1 March 2013.

Stats SA noted that despite the strikes in the mining industry, no job losses were observed over the course of the quarter in the industry, but that there was a sharp increase in absenteeism.

On whether there were anticipated job losses in the future, Masiteng said this "could depend on what happens actively in the future".

Nedbank economists said that both local and economic conditions were not expected to improve significantly in 2013.

"Weak confidence and high wage settlement will make firms more cautious to expand capacity and employ more people this year. Government is likely to be the main driver of employment as it rolls out its infrastructure and job creation plans."

The economists said the reduction in the unemployment rate was, however, good news.

"Although the reduction in the unemployment rate is good news, it mainly reflects the large number of discouraged work seekers. Overall, economic activity remains generally sluggish, while upside risks to inflation have increased due to a weaker rand.

"We believe that this will compel the Monetary Policy Committee to keep monetary policy neutral over an extended period, with interest rates remaining unchanged for most of 2013.

"A reversal in policy easing is likely only late in the year or even in 2014. However, deterioration in both the global and domestic economies would increase the chance of another cut," said Nedbank.