South Africa's jobless rate dipped in the second quarter of this year, but the underlying message from official data released on Wednesday was still alarming, showing that the pace of job creation remains weak and poses a threat to social and political stability. Unemployment fell to 25%, from 26.4% in the first three months of the year, with 198000 more people finding jobs in the second quarter, Stats SA said. story_article_left1But the figures were flattered by a 107, 000 drop in the labour force, and most jobs created were in the informal sector - only 39000 were formal employment.This meant the new jobs could be a means of "survival" and were probably not sustainable in the long run, said Kefiloe Masiteng, deputy director-general for population and social statistics at Stats SA.She said in an interview that she was even more concerned about the much higher jobless rate for young people. Half of 15- to 24-year-olds are unemployed, compared with 30% of adults between 25 and 34, and just 16% of those aged 35 to 64."The major issue is that many people are getting left behind - we have a high number of unskilled labour who are unemployed and unemployable because of their low attainment of education. That will keep them marginalised," she said.Unemployment is likely to rise in all age groups in the coming months.The top mining companies have announced a need to cut thousands of jobs because of falling commodity prices and weak demand from China.Lonmin has said it could cut 6000 jobs, and Anglo American will axe a third of its global workforce, with unclear consequences for South Africa. Employees at steelmakers will also be affected, and Telkom has warned it needs to cut 4400 jobs. This follows retrenchments at MTN and Cell C. Pali Lehohla, statistician-general at Stats SA, declined to speculate on the consequences of these retrenchments, saying most had not materialised yet.Finance Minister Nhlanhla Nene warned last weekend that the public sector, the main driver of job creation over the past few years, could no longer afford some of its spending plans, because of steep pay increases.story_article_right2This would affect job creation, he said in a report presented to the ANC that was leaked to the media. "There has been no real employment gain or income growth for the past seven years. It is unlikely that this will improve in the medium term. This has significant social and political consequences."There are 5.2million officially unemployed people in South Africa, and with those who have given up looking for jobs added, the overall jobless rate rises to 34.9%.The data show that 79000 construction jobs - which are often temporary - were created in the second quarter, while the trade sector generated 73000.The biggest losses were in finance, which shed 31000 jobs; manufacturing, which shed 23000; and agriculture, which lost 22000 jobs.One of the main obstacles to job creation is the economy, which is unlikely to grow at more than 2% this year or next, hobbled by power constraints and reduced demand.Business maintains that the main challenges are red tape, rigid labour laws and thorny relations between business, the government and unions.story_article_left3Alan Mukoki, the new CEO of the South African Chamber of Commerce and Industry, said the government should do more to support small businesses . South Africa spends more on small enterprise development than any other country relative to the size of its economy, but more than 80% of small enterprises fail within five years.A Global Entrepreneurship Monitor study found entrepreneurial activity in South Africa dropped to 7% last year - a quarter of the level elsewhere in Africa - from 10.6% in 2013 as businesses went bust."There is scope for the elevation of hand-holding by government," Mukoki said. "Entrepreneurs need access to markets, improved business skills and finance."Labour federation Cosatu asked the ANC to convene an indaba to discuss employment after this week's jobs data. The DA has called for a debate in parliament on the "jobs crisis".isam@sundaytimes.co.za..