SA’s unemployment rate drops to lowest level in nearly a year, but constraints remain

South Africa’s official unemployment rate fell to 31.9% in the third quarter of 2025, the lowest level in nearly a year, as 248 000 more people found work between July and September.

This jobless rate the lowest level since the fourth quarter of 2024, falling from 33.2% in the second quarter of 2025, marking the first decline this year. 

Statistics South Africa (Stats SA) Quarterly Labour Force Survey (QLFS) on Tuesday reported that the number of employed persons increased to 17.1 million, while the number of unemployed persons decreased by 360 000 to eight million between the second and third quarters of the year.

As a result, the overall labour force shrank slightly by 112 000 (0.4%), while the number of discouraged work-seekers rose by 36 000 to 3.5 million.

Other available jobseekers increased by 130 000 to 965 000, and unavailable jobseekers by 64 000 to 83 000, leading to a net rise of 230 000 in the potential labour force population, now totalling 4.5 million.

These shifts saw the official unemployment rate drop by 1.3 percentage points, while the expanded unemployment rate — which includes discouraged jobseekers — decreased by 0.6 percentage points to 42.4%.

While the the third quarter labour data offers a rare boost of optimism for South Africa’s sluggish economy, experts agree that the recovery remains fragile and uneven as millions remain unemployed.

Taking a holistic view of the year, the country still experienced a net decrease in employment of 24 000, following a 291 000 job loss in the first quarter, a marginal increase of 19 000 in the second quarter, and 248 000 in the third.

As such, the rebound in third quarter is seeb a recovery from earlier losses, not yet a sign of structural improvement.

Nedbank economist Busisiwe Nkonki said the outlook for the labour market remains fragile, but there are signs of cautious optimism.

Nkonki said Job creation will continue tobe constrained by embedded structural inefficiencies, which undermine confidence and employment in the private sector.

"Meanwhile, higher tariffs imposed by the US will add further strain on export-oriented industries," Nkonki said.

"On the upside, consumer spending is expected to improve further, supported by rising real incomes, subdued inflation, lower interest rates and Two-Pot retirement withdrawals. As a result, we foresee continued growth in job creation by the domestic trade sector." 

Still, the latest figures suggest that targeted stimulus, infrastructure investment, and seasonal hiring may be slowly easing the country’s stubborn unemployment burden.

Professor Raymond Parsons, a North-West University Business School economist, described the report as a positive signal that unemployment may have peaked for now.

“The latest labour trends suggest that unemployment may have peaked for now. Although unemployment is still unacceptably high, the present economic recovery has now become sufficient to make a modest dent in the unemployment level," Parsons said.

"There is still a long way to go. It confirms that the emphasis in policy, including in the Medium Term Budget Policy Statement this week, must continue to strongly be on promoting job-rich growth.”

According to Stats SA, six of 10 industries recorded job gains, led by construction, community, and trade, while losses were concentrated in manufacturing and finance sectors.

Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa, said that agricultural employment rose by 2% quarter-on-quarter, with the sector now employing 920 000 people.

“We see the quarterly improvements mainly in some field crops, horticulture, forestry, and in the production of organic fertiliser. The increase in jobs reflects the optimism generated by the abundant harvest in these subsectors, which we have highlighted on numerous occasions,” Sihlobo said.

Similarly, Investec economist Lara Hodes highlighted construction as a standout performer, with the sector adding 130 000 jobs in the third quarter, a 10.3% quarterly increase.

However, Hodes said the manufacturing sector has been constrained by lacklustre domestic demand, global uncertainty which continues to weigh on new export orders and the myriad of structural challenges weighing on optimal activity.

"South Africa’s official unemployment rate improved somewhat in the third quarter but remained elevated, reflective of a subdued economy with insufficient economic growth to drive sustainable job creation," Hodes said.

"Specifically, modest GDP growth of 1.1% is projected for the year. Global uncertainty prevails as a result of the US’s protectionist policies, while domestic challenges continue to weigh on sentiment levels and accordingly investment potential." 

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