Unemployment has dropped – but it is seasonal
The good news is the unemployment rate improved late last year. The bad news is it's a seasonal thing...
South Africa’s unemployment rate improved in the fourth quarter‚ as might be expected for a quarter that usually brings a temporary hiring boost thanks to the holiday season.
Unemployment from September to December was estimated at 26.7%‚ Statistics SA said on Tuesday. That is a whole percentage point better than the 27.7% seen in the July-September quarter and compares with Investec’s forecast of an improvement to 27%. Unemployment in the fourth quarter of 2016 was 26.5%.
Investec’s Kamilla Kaplan said in her preview last week that a fourth-quarter rate of 27% would put unemployment for all of 2017 at 27.5%‚ up from 26.7% for all of 2016.
Unemployment rose to 27.7% in the first quarter of last year — its highest level since 2003‚ and worse than the rates of 23%-24% seen in the 2008-09 financial crisis — and stayed at that level for most of the year.
Trading Economics and FNB had both expected unemployment to remain at 27.7%.
The absorption rate deteriorated in the fourth quarter compared with the third‚ to 43.1% from 43.3% — and lower than the 43.5% seen a year earlier.
The absorption rate is the ratio of employment to population‚ and measures the ability of the economy to provide work for job seekers. Unlike the unemployment rate‚ an increase in the absorption rate is a positive sign.
The number of unemployed people fell to 5.88-million‚ from 6.21-million in the third quarter‚ and compared with 5.78-million in the final quarter of 2016.