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Expanded unemployment rate jumps to 42% in 2020Q2

29 September 2020 PwC

Employment falls to 2011 levels as 2.2 million jobs lost due to lockdown

Statistics South Africa (Stats SA) reported on September 29 that employment in South Africa declined by 2.2 million during the lockdown-hit second quarter of 2020. The official (narrowly defined) unemployment rate dropped to 23.3% in Q2 from a record-high 30.1% in the preceding quarter. However, this statistical fluke was due to a 33.4% q-o-q increase in the number of people classified as ‘not economically active’. This grouping includes adults who were able and available to work but was without a job, did not look for work, and did not try to start their own business. Around 2.8 million of these people were during Q1 still considered unemployed, i.e. looking for work in Q1 but unable to do so during Q2.

With so many people stuck at home during April-June, and with these people included in the ‘not economically active’ due to the lockdown keeping them from job hunting, the number of South Africans classified as unemployed fell by 39.2% q-o-q during the second quarter to just 4.3 million. This resulted in the sharp dive in the Q2 unemployment rate. Stats SA noted that a large increase in inactivity other than in unemployment (i.e. being not economically active) has been observed in most countries across the world. As such, “the picture observed in South Africa is in line with the rest of the world”.

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