The Event
South Africa’s unemployment rate decreased to 34.50% in the first quarter of 2022, down from 35.30% recorded in the previous quarter – making this the first decrease since August 2020.
The number of unemployed persons decreased by 60 thousand to 7.9 million, while employment rose by 370 thousand to 14.9 million and the labour force by 310 thousand.
Data from Statistics South Africa’s (StatsSA) Quarterly Labour Force Survey shows that job additions were observed in the community and social services (281 thousand), manufacturing (263 thousand) and trade (98 thousand). Contrary, job losses were recorded in private households (186 thousand), finance (72 thousand), followed by construction (60 thousand) and agriculture (23 thousand) over the quarter.
The impact
The FTSE/JSE All Share Index pared early gains, trading 0.30% higher at 72 172.65 at 12h00 on Tuesday. The biggest winners in morning trade were Tiger Brands, Thungela and Alphamin, while Goldfields, Hammerson and Montauk lagged.
The local 5-year and 10-year yields were up 8.14% and 9.66%, respectively.
The rand weakened somewhat against the dollar, trading at R15.75/$.However, it strengthened against the other major global currencies, trading at R16.70/€ and R19.64/£ at 12h00 on Tuesday.
The assessment
The decrease in unemployment is a positive development, given the current tough economic backdrop.
However, to ensure a upward trend in employment, both the private and public sectors must accelerate the implementation of structural and pro-business reforms to unlock investment, reduce costs and increase competitiveness and growth, all of which will go a long way in creating sustainable employment.
The decrease is in line with our previous comment that although the pandemic has lasted far longer than anticipated, we expected the employment situation to stabilise at pre-pandemic levels this year as vaccination rates rise and more workers return to the labour market.
ENDS
