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South Africa unemployment jumps 52% in the third quarter

Stats SA has published the latest unemployment numbers for the third quarter of 2020, providing a clearer indication of how the national lockdown hammered jobs in South Africa.

The results of the Quarterly Labour Force Survey (QLFS) for the third quarter of 2020 shows a large movement out of the “other not economically active” category to “employed” and “unemployed” categories between the second quarter and third quarter of the year.

This paints a better picture of how the lockdown impacted jobs in the country. In the second quarter data, Stats SA handled the jobs lost as a result of lockdown by removing them from the workforce, rather than classifying them as unemployed.

This had the effect of actually decreasing the country’s unemployment rate – 23.3%.

With that classification now feeding into more typical ’employed’ and ‘unemployed’ categories, the country’s narrow definition of unemployment moved to 30.8% – with the broader definition (which includes discouraged work seekers) at 43.1%.

The movement – from Q2’s classification – was proportionately more towards the unemployed than for the employed, Stats SA said.

The number of employed persons increased by 543,000 (3.8%) to 14.7 million compared to the second quarter of 2020 – employment remains nearly 1.7 million below the level in Q3 2019.

Unemployment increased substantially by 2.2 million (52.1%) to 6.5 million, compared to the second quarter of 2020.

The number of discouraged work seekers increased by 225,000 (9.1%), and the number of people who were not economically active for reasons other than discouragement decreased by 2.9 million (15.8%) between the two quarters.

Stated simply, of the 2.85 million people who ‘left’ the country’s workforce during lockdown, only 543,000 managed to get their jobs back, leaving 2.2 million unemployed, and 225,000 joining the group of discouraged work seekers.

A more positive spin on the latest numbers is that all sectors are increasing employment once again. However, this comes with the caveat that the numbers are still well below those presented before the lockdown.

Formal sector employment increased by 242,000 (2.4%);

Informal sector employment by 176,000 (7.7%);Private households by 116,000 (11.5%) , and

Employment in Agriculture increased by 9,000 (1.1%).Employment increased in all industries, except utilities and transport. The industries which gained the more jobs were finance (200,000), community and social services (137,000) and private households (116,000).

Compared to the third quarter in 2019, employment contracted in all industries except mining where it remained unchanged in Q3 2020.

Most job losses were observed in trade (400,000), manufacturing (300,000), community and social services (298,000) and construction (259,000).