Unemployment has hit its highest on record, hurting efforts to convince ratings agencies Standard and Poor’s and Fitch not to downgrade South Africa’s credit rating
Stats SA reported yesterday that unemployment had risen to 26.7% of the labour force in the first quarter of this year — the highest since the current method of collating the figures was introduced in 2008.
This was up from 24.5% in the previous three months and well above the 25.7% that had been predicted by economists. The number of people without a job rose by 521 000 to 5.71 million.
Manufacturing shed 100,000 jobs, trade 119,000 and construction 77,000. Agriculture and government service were the only sectors in which employment grew.
The rand retreated more than 2% in the first quarter, partly because of the jobless rate but also because of a global commodity sell-off and a firmer dollar. The currency later recovered to trade 1.9% weaker at R15.15 to the dollar, near its worst level in a month.
Gauteng municipalities had the biggest fall in employment with 195,000 jobs lost. Six of the country’s eight metros recorded job losses, with eThekwini, in KwaZulu-Natal, shedding 144,000 and Ekurhuleni, in Gauteng, 111,000. The Cape Town and Nelson Mandela Bay municipalities increased their payrolls by 4,000 and 3,000 jobs respectively .
After the decision by Moody’s on Friday to keep its rating steady , Finance Minister Pravin Gordhan said he intended to show other agencies that this country was on the right economic track.
Gordhan said yesterday: “We developed a common intent among labour, business and government that we don’t want to be downgraded and that we have many positives to say about ourselves .
“All we can do is work as hardas we can to convince people out there that we are a country that is capable of solving its problems.” President Jacob Zuma was scheduled to meet business and labour leaders yesterday.[Source: Reuters]