Africa’s jobless rate quickens as economy struggles
South African unemployment rose in the first quarter of 2012, data showed on Tuesday, in a sign that economic growth remains far below the levels needed to create jobs, one of the most pressing challenges facing the government.
The jobless rate jumped to 25.2 percent of the labour force in the first quarter from 23.9 percent in Q4, with employment decreasing by 75,000 between the two quarters, Statistics South Africa said in its latest quarterly Labour Force Survey.
The number of unemployed people stood at 4.5 million in the three months to March from 4.244 million in the fourth quarter.
While the manufacturing and retail sectors created new employment, jobs were lost in the construction sector, pointing to economic activity remaining generally depressed after Africa’s largest economy suffered a recession in 2009.
The data backs the case for interest rates remaining at 30-year lows as the Reserve Bank balances the need to boost economic growth with concerns over rising inflation.
The Reserve Bank slashed its repo rate by 650 basis points to 5.5 percent in the two years to end-2010, but has since left it unchanged, with CPI consumer inflation hovering at the top of a 3-6 percent target band.
“Today’s numbers play into our more bearish view on growth this year and that a sharper slowdown in retail will be on the way as aggregate disposable income drops,” Nomura emerging market analyst Peter Attard Montalto said.
“This also reinforces our view of rates being on hold for longer than consensus and the chances of cuts as a … tail risk still very much being there.”
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