14
November 2024
SA's unemployment rate dropped to 32.10% in the third quarter of 2024
Adriaan Pask
Chief Investment Officer, PSG Wealth
Event
• South Africa's unemployment rate dropped to 32.10% in the third quarter of 2024, a decline from the two-year
peak of 33.50% recorded in the previous quarter. This marks the first reduction since the third quarter of 2023.
• The number of unemployed individuals decreased by 354 thousand, bringing the total to 8 million—the lowest level
in nearly a year. Meanwhile, the labour force declined by 79 thousand to 24.9 million.
The Impact
| Latest | Previous | Change | |
| Population | 64 million | 62.02 million | Increase of 1 980 000 |
| Labour force participation | 60.20% | 60.20% | Decreased by 0.40 percentage point |
| Employment-population ratio | 40.90% | 40.30% | Increased by 0.60 percentage point |
| Unemployed | 32.10% | 35.50% | Decreased by 1.40% |
| Expanded unemployment rate (Not in the labour force) | 41.90% | 42.60% | Decreased by 0.70 percentage points |
| Unemployed persons | 8 Million | 8.3 million | Decreased by 354 thousand |
The FTSE/JSE All Share Index saw a slight decline following the release of the latest employment data, hovering
around 84 200. Global market sentiment was weighed down by growing scepticism over China's economic stimulus
measures and rising caution surrounding President-elect Donald Trump's policies, which could compel the Federal
Reserve to reassess the timing of future interest rate hikes.
• South Africa’s 5-yearand 10-year bond yields rose to 8.44% and 9.32%,respectively.
• The rand had weakened 1.33% to R18.14/$ — having touched an intraday worst of R18.17/$ — the weakest level
since August following the release of the latest employment data.
Source: Stats SA, Trading Economics
The Assessment
The reduction in unemployment is an encouraging sign, especially considering the current economic challenges.
• This also indicates that labour market conditions in the country are slightly easing, which increases the likelihood that the South African Reserve Bank (SARB) could cut interest rates at future meetings.
• Following an expected 25-bps cut next week (21 November 2024), the market anticipates a further 75-bps reduction in
2025, taking the repo rate down to 7% and the prime lending rate to 10.50% by the end of next year.
• The next unemployment report is scheduled to be released onTuesday, 18 February 2025.