South African Unemployment Rate Climbs as Farms Shed Jobs

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(Bloomberg) -- South Africa’s unemployment rate rose in the fourth quarter as the social services and agriculture sectors cut jobs.

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The official jobless rate increased to 32.1% in the three months through December from 31.9% in the previous quarter, Statistics South Africa said in a report released in the capital, Pretoria, on Tuesday. The median estimate of eight economists surveyed by Bloomberg was 31.6%.

The negative data may further erode voter support for the ruling African National Congress’s before elections later this year and bring more pressure to bear on the country’s fragile finances as fewer people pay taxes and more draw on welfare grants. A 350-rand (S18) monthly stipend for the unemployed already has 9 million recipients and President Cyril Ramaphosa has pledged to extend and improve it.

Finance Minister Enoch Godongwana will provide more details on the nation’s finances when he tables the budget on Wednesday.

Unemployment according to the expanded definition, which includes people who were available for work but not seeking a job, stood at 41.1%, compared with 41.2% in the September quarter, Statistics South Africa said.

The jobless rate may continue to rise as weaker commodity prices, energy shortages and logistics constraints on the freight-rail system and at ports operated by Transnet SOC Ltd. take their toll on mining companies’ profits. Anglo American Platinum Ltd. on Monday proposed a restructuring that may affect 3,700 jobs across its South African operations and Seriti Resources Holdings Ltd. is considering laying off 600 workers.

The latest rise in joblessness was unsurprising, given that consumer spending remains under pressure, said Casey Sprake, an investment analyst at Anchor Capital.

“Currently, businesses remain under significant pressure from the ongoing effects of loadshedding, which is also weighing on jobs and the unemployment data,” she said, referring to the local term for blackouts. “The economy is simply not growing at an adequate rate to sustainably boost long-term employment prospects for South Africans.”

Highlights for the quarter:

  • The agriculture sector lost 35,000 jobs.

  • The mining industry added 37,000 jobs.

  • Manufacturing lost 1,000 jobs.

  • The finance industry gained 128,000 jobs.

  • The community and social services sector lost 171,000 jobs.

--With assistance from Ntando Thukwana and Alister Bull.

(Updates with analyst comment from seventh paragraph)

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