South Africa’s unemployment rate hits new all-time high

Stats SA has published its latest Quarterly Labour Force Survey (QFLS) for the first quarter of  2021, showing a marginal increase in the number of unemployed people in the country, to an all-time high of 32.6%.

The results of the QLFS show that the number of employed persons remained almost unchanged at 15 million – a slight decrease of 28,000 – in the first of quarter 2021.

The number of unemployed persons also remained almost unchanged at 7.2 million compared to the fourth quarter of 2020 – an increase of 8,000.

The number of discouraged work-seekers increased by 201,000 (6.9%), and the number of people who were not economically active for reasons other than discouragement decreased by 38,000 (0.3%) between the two quarters, resulting in a net increase of 164,000 in the not economically active population.

“These minor changes resulted in the official unemployment rate increasing by 0.1 of a percentage point from 32.5% in the fourth quarter of 2020 to 32.6% in the first quarter of 2021 – the highest since the start of the QLFS in 2008,” Stats SA said.

The unemployment rate according to the expanded definition of unemployment increased by 0.6 of a percentage point, to 43.2% in the first quarter compared to the fourth quarter of 2020.

Stats SA said that to better understand the observed changes in the key labour market indicators between Q4: 2020 and Q1: 2021, tabulations were made to study movements between labour market status categories.

Here it was observed that a large number of people moved from the “employed” status to “not economically active” and “unemployed” categories between the two quarters.

The movement was proportionately more to the not economically active than for the unemployed, which resulted in an increase of 0.1 of a percentage point in the unemployment rate to 32.6%.

The labour force participation rate was also lower in Q1: 2021 as compared to Q4: 2020 as a result of these movements – decreasing by 0.2 of a percentage point to 56.4%. The absorption rate also decreased by 0.2 of a percentage point to 38.0% in the first quarter of 2021 compared to the fourth quarter of 2020.

These numbers reflect an economy still greatly impacted by the Covid-19 pandemic and resulting lockdowns of 2020, with many capable workers still inactive.

Compared to a year ago – before the pandemic hit – total employment decreased by 1.4 million. The number of unemployed persons increased by 2.4% (172,000), while the number of persons who were not economically active increased by 11.6% (1.8 million).

A million and a half of these individuals are in the “other” category, used to house those who lost their jobs due to pandemic or lockdown-related circumstances.

The largest employment decreases were observed in private households (70,000), followed by the informal sector (19,000), and the agricultural sector (18,000) in Q1: 2021.

Employment increases were only observed in the formal sector (79,000).

Read: Unemployment in South Africa has likely reached its high point: economists