Unofficial unemployment rate rise ‘worrying’: Economist

JOHANNESBURG - The unofficial unemployment rate has risen “worryingly”, Investec Group economist Annabel Bishop said on Tuesday.

Her comment followed the earlier release of the Quarterly Labour Force Survey by Statistics SA for the fourth quarter of 2009.

“The unofficial unemployment rate, which includes those too discouraged to seek work any more... rose by 4.8 percent to 34.2 percent compared to a year ago and the number of discouraged job seekers rose by 518,000,” Bishop said in a statement.

Although Stats SA had found that 89 000 jobs were created in the fourth quarter of 2009 on a net basis, the nature of most of these jobs was “mostly informal and elementary”.

“Statistics SA classifies them as unsustainable and we believe them to be seasonal,” Bishop said.

The unemployment rate, according to Stats SA, was virtually unchanged from 24,5 percent in the third quarter to 24,3 percent in the fourth quarter of 2009.

“The economic recovery has not yet translated into significant changes in the unemployment rate or employment rate,” Bishop said.

She said the year-on-year picture still showed massive job losses of 870,000.

Out of the 116,000 jobs created in the informal sector quarter-on-quarter, 37,000 were in finance and virtually all of these were not related to financial intermediation, insurance and pension funding or real estate activities.

“Instead, 34,000 jobs were created informally in financial activities ranging from debt collectors and micro-lenders to labour brokers.

“Last year, this sector also saw a sharp increase, reflective of seasonality and also growth in financial hardship in the population, along with the financial pressures of the festive season.”

Bishop said that without the sharp, seasonal rise in job creation in the informal sector, 28,000 jobs would have been lost instead of 89,000 created.

While the rise in employment was good news, the nature of the bulk of the work created was not “particularly cheering.”

“But we expect an improvement in quality from the second quarter of 2010,” she said.

- Sapa