Unemployment rate eases to 24.7% in third quarter

More employed people means the unemployment rate has fallen. Image: Stuart Miles Free Digital Photos

"The unemployment rate decreased by 0.9 of a percentage point from 25.6% to 24.7% in quarter three of the year," said Stats SA as it released its Quarterly Labour Force Survey (QLFS) for the third quarter.

The QLFS is a household-based sample survey conducted by Stats SA. It collects data on the labour market activities of individuals aged 15 years or older, who live in South Africa.

Stats SA said that quarter-on-quarter employment increased by 308,000 while the number of those seeking jobs fell by 114,000.

"This resulted in an increase of 194,000 in the labour force," said Stats SA, adding that the formal sector and private households contributed positively to the increase in employment.

The growth in employment was driven by growth in the formal sector, where quarter-on-quarter job gains were 314,000, while the informal sector lost 39,000 jobs.

Rise in formal sector jobs welcomed

"The rise in formal sector jobs is encouraging. However, this does not reflect a sustained increase in job levels. Subdued economic growth on the back of still weak, although improving, global conditions and lack-lustre domestic output growth points towards job creation remaining generally slow in the next few quarters," said Nedbank.

According to Stats SA, community and finance and other business services in the quarter-on-quarter results were revealed as the largest contributors to the 308,000 net gain in employment, with trade gaining 100,000 jobs and community and social services gaining 96,000 jobs.

"Compared with a year ago, employment increased by 2.8% (383,000 jobs), and unemployment fell by 1.2% (58,000 jobs)," said Stats SA.

According to the survey, the number of discouraged work seekers (people who are willing and are able to work but are not actively looking for employment) fell by 125,000 to 2.24m during the quarter.

"These numbers confirm that demand-driven inflation remains subdued. We expect the Reserve Bank to keep interest rates unchanged well into next year as it seeks to strike a balance between high cost-push inflation and modest domestic growth," said Nedbank.

The central bank will hold its last Monetary Policy Committee meeting for the year from 19 to 21 November.