South African unemployment hits two-year high

South Africa’s unemployment rate unexpectedly rose in the second quarter to the highest level since 2022, driven by job losses in the trade and agriculture sectors. 

The unemployment rate advanced to 33.5% in the three months through June compared with 32.9% in the previous quarter, data released by Statistics South Africa in the capital, Pretoria showed on Tuesday.

The median estimate of three economists surveyed by Bloomberg was for the jobless rate to tick down to 31.8%.

The number of people employed fell by 92,000 to 16.7 million. 

The jobless rate rose despite a significant improvement in the performance of state-owned power utility Eskom, which did not have to ration electricity at all during the quarter.

Planned power outages, known locally as load-shedding, have constrained South Africa’s economic growth and job creation for more than a decade.

But since late March, Eskom has managed to keep the lights on thanks to improved maintenance of its power plants.

With 8.4 million unemployed, South Africa’s jobless rate remains very high. That’s a major challenge for the country’s new governing alliance, formed after the May 29 elections in which the African National Congress lost its majority for the first time since 1994.

The so-called government of national unity, which joins the ANC and centrist Democratic Alliance, plus a number of smaller parties, has pledged to prioritize job creation and economic reform to boost growth, which has averaged a meagre 1% for the last decade.