South Africa’s unemployment rate hits record high in Q3, signals ailing labor market

Unemployment rate in South Africa hit its record-high, at least in eight years, during the third quarter of this year, signaling a continuous depression in the country’s labor market.

The jobless rate rose to 27.1 percent in the quarter through September, the highest in at least eight years, from 26.6 percent in the previous three months, data released by Statistics South Africa showed Tuesday in the capital, Pretoria. The median of six economist estimates compiled by Bloomberg was 26.6 percent. The number of people without jobs rose by 239,000 to 5.9 million while those employed increased by 288,000 to 15.8 million.

The government aims to reduce the jobless rate to 6 percent by 2030; the economy needs to expand at 7.2 percent a year from 2018 to achieve the target, according to World Bank projections. Finance Minister Pravin Gordhan projected output growth of 2 percent and 2.2 percent for 2018 and 2019 in his October mid-term budget.

The sluggish economy, policy uncertainty and rigidities and instability in the labor market are some of the factors that rating companies like Moody’s Investors Services and S&P Global Ratings Ltd., which will publish their assessment of the nation’s creditworthiness in the next two weeks, have highlighted as risks, Bloomberg reported.