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Unemployment rises to 26.7% in first quarter

The rand takes a hit.

South Africa’s unemployment hit its highest level on record in the first quarter, official data showed on Monday, clouding the country’s efforts to convince the major ratings agencies not to downgrade its credit.

Moody’s late on Friday left its rating unchanged, giving the rand currency a lift on Monday morning in reaction. Finance Minister Pravin Gordhan said he aimed to show the other big ratings agencies that the country was on the right economic track ahead of their own reviews in the coming weeks.

But the statistics agency dealt Gordhan’s hopes a blow later on Monday when it said unemployment had risen to 26.7% in the first quarter – the highest level since the labour force survey began in 2008.

The rand dropped sharply on the news and was down more than 2.27% against the dollar by 23:25.

South Africa, one of the world’s biggest metals producers, has been hit by a slide in commodities prices which has come on top of widespread labour unrest in the mining industry.

President Jacob Zuma said the economy should be able to “weather the storm” as he unveiled initiatives aimed at accelerating growth including a private and public sector fund for small businesses after meeting business and labour leaders on Monday evening.

“We remain optimistic that we will be able to weather the storm, especially if we continue working together in this manner,” Zuma said in a late night television broadcast.

Earlier Gordhan warned against complacency after Moody’s appeared to give Africa’s most industrialised economy some breathing space.

Hastily reappointed as finance minister in December after Zuma rattled investors by inexplicably replacing his predecessor with a little-known politician, Gordhan warned that a global downturn meant South Africa was on its own in tackling its economic woes.

“We can’t be positive. All we can do is work as hard as we can to convince people out there that we are a country that is capable of solving its problems,” Gordhan told reporters at a public finance management conference in Johannesburg.

“We need to find new and innovative ways to search for new engines of growth, to find new ways of igniting growth and creating the jobs that our people desperately require,” he said.

The wobbly economy has raised the stakes ahead of local elections on Aug. 3 which analysts say will be the sternest political test that the ruling African National Congress has faced since coming to power in 1994.

“Today’s employment figures are very grim, but tell us little that we didn’t already know about South Africa’s troubled labour market. The political impacts may be more significant,” said Africa analyst at Capital Economics John Ashbourne.

Gordhan plans to hold meetings with Fitch and Standard & Poors in the next couple of weeks after Moody’s had said the country was “likely approaching a turning point after several years of falling growth.”

Moody’s left its rating of South Africa’s debt at Baa2, two levels above sub-investment grade, citing risks to implementation of structural and fiscal reforms.

The Treasury in February forecast tepid growth for Africa’s most industrialised economy of just 0.9% in 2016 from a previous forecast of 1.7% and compared with estimated growth of 1.3% in 2015.

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Now sitting at R 15.176 at 3.38 p.m. this economy is tanking – brought to you by the nonchalant ANC

the reality on the ground is vastly different!!!

And then there are those who are “looking for work but hoping not to find it”. My wife recently set up interviews for 8 people for a domestic position. We pay R210 per day which is double the minimum. Of the 8, only 4 showed up and 3 of them all had excuses like “can’t work on Wednesdays because I have to go the clinic, can’t work on Fridays because blah, blah.” Eventually she took the one who didn’t have excuses. However, her domestic problems are endless and she always wants to take an advance on her salary. Her daughter (age 21) doesn’t have a job and neither has her boyfriend but they now had a baby. The four of them all live together and off her mother’s R210 per day. I can get her daughter a job if only she finishes matric but that is way too much work. Some people create their own problems and are responsible for their own poverty. “Finish and klaar” as JS said.

The statistics are frightening. Regrettably it will get worse before getting better.

I have a Zimbabwean who has a work permit issued at the time of the amnesty, and who has worked for me for 13 years. He has chosen to bring to South Africa a child he fathered and had living in Zimbabwe, and has decided to move his present girlfriend, his second child from this girlfriend, the child from Zimbabwe and himself to some or other squatter camp as he says he is better off there than in the included and free paid for accommodation he has which while employed here includes water and electricity. He has also resigned from his job from the end of May and says he will cope with peace work from time to time. I am not able to understand his choice, but then, he has his life to live and I only need to employ someone else of which there is an abundance of choice for me.

My guy is expecting to collect a huge long service award and also claim UIF when he leaves at the end of the month, none of which he will get as he has handed in written notice to terminate his employment. I am not sure how his mind works, but it is his issue.

Unemployment statistics are not always due to jobs not being available. Go figure, I can’t work it out.

these are quite depressing anecdotes. in my experience the vast majority are simply battling to make ends meet.

when we needed to hire a helper in 2013 we used an agency in fourways and they set up a series of 5min interviews. bearing in mind that their suggested wage was R100 per day (ie R2200 per month for what we wanted), I was stunned that we had 10 applicants. Each was desperate for the role, some happy to travel from cosmo city to rosebank by taxi each day (>3hrs, >R50 per day of the R100) just for the job.

can you imagine taking a full time job where you commute for 3 hours a day and take home less than R50 ??

it really brought home how tough it is for the vast majority …. that majority far removed from the (relatively) very wealthy who read this site.

(before the trolls arise, for the record we paid a lot more than the suggested pay)

It will get much worse . Add the impending Minimum Wage Implementation , Govmnt shifting goal posts as with the Mining Charter and BBBEE Regulations and so the list goes on . It is also noteworthy that many Domestics have been Retrenched . It is a Sorry and Unnecessary Situation which can be remedied when Politics and Business are kept apart .

To say I am sickened to the core by these comments would be an understatement. U guys have no idea of the hatred that the masses have for you. No doubt you all live in swanky homes, surrounded by high walls, kids go to private schools erc. It is for this reason that I will be voting EFF at next general election -hoping that they can bring real change to my erstwhile country. The country needs to be rebuilt from the bottom up. U guys need to brush up on what happened in russia after the revolution and in Cuba post 1959 -also might want to read “Rwanda genocide”

To robertinsydney. I still have to decide in you are a full box of chocolates or not. Perhaps it is more the case of the wheel turning but the hamster is dead? Not sure. I have read many of your posts and you seem to run with the hares and hunt with the hounds. I would love to hear your explanation for this imbalance….

Robert in Soweto, you are my hero!!!

The only real change the EFF will bring is to reduce what is left of this country to absolute rubble. The fact is investors don’t invest in jurisdictions ruled by dictators accused of corruption, suffering from struggle envy who don’t understand that money and markets are colour blind and merely driven by supply and demand. And as for genocide, the old SADF/ Koevoet brushed off the ANC’s MK and SWAPO in Namibia with absolute ease and the MPLA/Cubans in Angola. But for the Cubans they were a joke to say the least. Therefore I wouldn’t worry about the EFF.
PS Your one vote isn’t going to make a difference so keep it to yourself.

@robertinsydney…..its funnier when you are regaling us with your tales of amazing investment decisions and ’boutique’ accounting firms. please do share more

@robertinsydney. None so homesick and trying to justify living in the nanny state as Safers in Oz. Personally I can’t breathe in OZ. I agree on only one point. Our situation is a mess and it can very well lead to civil war. People throughout history have turned to revolution when pushed over the edge. We should have started 300 years ago integrating and educating our fellow inhabitants. Unfortunately there are two basic problems universally. 1) (Generalising) The worst people become politicians with short term agendas, myopic foresight and no concern for the consequences of their decisions and laws. 2) Humanity cannot evolve to a higher level until we break our divisive paradigm of this vs that to one of unity consciousness. More travel and the connectivity of the internet might eventually pull us through. I try to be optimistic. However, specifically as jobs is concerned “we ain’t seen nothin yet’. Technology is wiping out thousands of jobs around the world daily and the trend is moving faster. The biggest corporate lie that all CEO’s have to make is that they want to preserve jobs and / or create more jobs. There is no sane CEO in the world that wants to employ 1 person more than they can do without because employees are by far most companies biggest problem. Generally 5 employees are more problems than 500 customers. Companies have to have a whole dedicated dept. to deal with all the BS involving employees. That alone is a wasted resource. Computers and robots not only do not need an HR dept., they work incessantly 24 hours a day 365 days a year with no BS, just some periodic maintenance. Employees have been saturated in most Western countries with socialism. Always depending on someone else to fulfil their dreams and demands. People need to wake up to a basic fact. Get off your ass and go and make it happen for yourself. Work your own path to independence rather than staying forever dependent and moaning about life. The wealth of a nation is the productivity of its people. In SA we have 25% unemployed, 15% petrol jockeys, 15% doing crime and 15% security guards. Add to this 30% of completely incompetent and almost entirely corrupt government employees, officials and politicians and grahamcr will in due course look back to now as the ‘good old days’ when the Rand used to be only R15.17 to the US$. So, in spite of this scenario I will continue to live here in paradise, look after my own interests, pay the iniquitous taxes on high income individuals and companies to support the above, but be prepared to jump on a plane when the mobs start throwing rocks through my windows. In a hundred years from now the government will still be blaming all their problems on the legacy of apartheid (which I do abhor) and as all governments have done throughout history, they turn a blind eye to xenophobia as it serves to deflect the blame and responsibility. In our case, in due course, anyone with a white skin will be the “visible” cause of the mass’s problems. Human nature never changes.

End of comments.

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