1 August 2012

South Africa: Decline in Unemployment is Encouraging

Pretoria — The decline in the unemployment rate down to 24.9% in the second quarter from 25.2% in the first quarter is encouraging, says Nedbank.

Releasing the Quarterly Labour Force Survey on Tuesday, Statistics South Africa said that the unemployment rate declined by 0.3% with the number of employed persons increasing by 25 000 people.

"Behind the increase in employment was an increase in formal sector employment of 62 000, while employment in the informal sector decreased by 21 000," said Stats SA.

The highest numbers of jobs over the quarter were created in the community and social services category followed by the construction and mining sectors.

"The decline in the unemployment rate is encouraging," said Nedbank, adding that indicators suggested that global economic conditions deteriorated even further in the second quarter and were expected to remain weak in the months ahead.

Companies were likely to remain cautious in employing more people.

"Some improvement in employment could be expected from the public sector as the government accelerates its infrastructure spending," said the bank.

"These numbers are not likely to influence the Reserve bank's stance in the short-term. With softer global demand, slowing domestic spending and an improved inflation outlook, we expect interest rates to remain stable well into 2013, when some reversal in policy easing then becomes possible."

Following a meeting of the Reserve bank's Monetary Policy Committee, Governor Gill Marcus recently announced the reduction of the repo rate from 5.5% down to 5%, a surprise reduction which was welcomed.

Copyright © 2012 SAnews.gov.za. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.