Stats SA said discouraged work-seekers rose by 160 000 or up by 5.0%, and the number of persons who were not economically active for reasons other than discouragement increased by 54 000 or 0.4% between the second quarter and third quarter. Picture: Bongani Mbatha / Independent Newspapers
The rand shrugged off the positive data that South Africa had reduced its unemployment rate and plunged to its lowest in three months yesterday pressured by a stronger dollar and lower precious metals prices.
Statistics South Africa (Stats SA) yesterday said the official unemployment rate fell by 1.4 percentage points to 32.1% in the third quarter of 2024, down from a two-year high of 33.5% in the second quarter.
Despite this, the rand continued to take a hammering from the stronger dollar, which has strengthened since Donald Trump won the 2024 US presidential race.
The domestic currency fell by 1% to R18.10 against the greenback, its weakest since mid-August, reflecting broader caution in emerging markets and wary of the economic impact of Trump’s trade actions and potential inflationary fiscal policies.
Investec chief economist Annabel Bishop said the outlook for the rand risks were weakening, with a shallower US rate cut cycle seeing less strength for the rand against the US dollar.
“A weaker rand would be expected to benefit trade, but retaliation to higher tariffs in the US is also a risk from 2025, on trade wars which characterised the previous Trump presidency, weakening global growth further, and so global trade/demand,” Bishop said.
“2025 is likely to be a volatile year, with global growth also at risk, and portfolio flows expected to strengthen the rand and other emerging markets countries instead at risk of being increasingly diverted into the safe haven of US treasuries, weakening economies.”
The quarterly Labour Force Survey (QLFS) showed that there was an increase of 294 000 in the number of employed persons to 16.9 million in the three months to September.
According to economists, the post-election optimism led to South African firms hiring more people in the third quarter as there was also a decrease of 373 000 in the number of unemployed persons to 8.0 million during the same period.
Stats SA said this resulted in a 0.3% decline of 79 000 in the labour force during the same period.
“Although the rate is still shockingly high, we forecast unemployment to gradually drift lower over the coming quarters thanks to the improved economic growth outlook,” said Jacques Nel, head of macro at Oxford Economics Africa.
For the year to date, total employment rose by 2.2% year-on-year, with 503 000 jobs created over the period.
Dr Elna Moolman, Standard Bank Group head of South Africa macroeconomic research, said the QLFS data painted a “relatively positive picture” on employment, and showed that jobs were created both on a quarter-on-quarter and on a year-on-year basis.
“Having said that, it's always worthwhile keeping in mind with this data-set that the data can be somewhat volatile from quarter to quarter, and it is also important to keep in mind that the detail tells us that formal private sector employment outside of the agricultural sector essentially trended sideways,” she said.
However, Stats SA said discouraged work-seekers rose by 160 000 or up by 5.0%, and the number of persons who were not economically active for reasons other than discouragement increased by 54 000 or 0.4% between the second quarter and third quarter.
This led to an increase of 214 000 in the number of the not-economically active population to 16.5 million.
As a result of these changes, the expanded unemployment rate in the third quarter eased by 0.7 of a percentage point to 41.9% when compared with the second quarter.
Nedbank economist Johannes (Matimba) Khosa said the outlook for the job market looked more promising.
“Employment will likely increase moderately as the economy recovers over the next 12 to 18 months. Trading conditions have already improved significantly, with load-shedding suspended and logistic networks slightly less clogged.
“While employment is forecast to increase, the pace of job creation will still be too slow to absorb new entrants into the labour market and reduce unemployment significantly. Consequently, the unemployment rate will likely remain high, easing only slightly and still leaving a large pool of discouraged workers.”
BUSINESS REPORT