SA’s unemployment rate increases to 35.3% in the fourth quarter of 2021

South Africa has seen a significant rise in its unemployment rate, reaching a record high of 35.3% in the fourth quarter of 2021. This data comes from a recent report that also highlights some mixed trends in the labor market. The expanded rate of unemployment, which includes discouraged workers, fell to 46.2%, indicating a complex scenario for job seekers in the country. The report has raised concerns as the official unemployment rate increased from 34.9% in the third quarter of the same year. Chief Economist at Investec, Annabel Bishop, discussed the findings of the report in an interview with CNBC Africa. She pointed out that while the increase in the unemployment rate is worrying, there was also a rise in the labor absorption rate to 36.5% from 35.9%. This increase was due to people transitioning from the 'not economically active' category to the 'economically active' category, with some finding employment while others joined the ranks of the unemployed as they actively sought work. Bishop highlighted the impact of the COVID-19 pandemic on the labor market, noting that around 2 million people lost their jobs during the harsh lockdowns, with approximately 5 million individuals classified as 'not economically active'. However, the easing of restrictions allowed some of these individuals to rejoin the labor force in the fourth quarter of 2021, with 262,000 people finding employment. The report also reflected the ongoing challenges faced by the South African economy, which is still grappling with a significant jobs deficit compared to pre-pandemic levels. Before the pandemic hit in March 2020, the country had 16.4 million people employed, but the current figure stands at 14.5 million, indicating a loss of 1.8 million jobs. Despite some positive signs of economic recovery, such as increased business investments and improved sentiment, Bishop cautioned that the road to job creation remains challenging. She mentioned that while there is cause for optimism with higher commodity prices and demand, along with enhanced activity in the services sector, the economy still needs to absorb a large number of job seekers. The formal unemployment rate, which currently stands at 10 million, combined with discouraged workseekers, paints a grim picture of around 14 million people looking for work. Bishop acknowledged the efforts to boost business sentiment and attract investments, but she emphasized that these measures alone may not be sufficient to address the unemployment crisis in the country. While the recent investment conference saw pledges of around 300 billion for South Africa, Bishop noted that this would not lead to a significant reduction in unemployment overnight. She underlined the importance of sustained efforts to create more job opportunities and support those seeking employment. The report's findings suggest that the South African economy is facing a critical juncture in its labor market, with millions of individuals seeking work amidst challenging economic conditions. The government and private sector will need to collaborate on long-term strategies to drive job creation and ensure sustainable economic growth in the post-pandemic era.