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Flash Notes

1Q25 QLFS: Employment momentum weakens

 

By Thanda Sithole

The Quarterly Labour Force Survey (QLFS), a household-based employment survey (not seasonally adjusted), reflected a decrease of 290 575 q/q in total employment during 1Q25, following an increase of 131 669 q/q in the previous quarter. However, compared to the same quarter last year, employment improved by 42 517 to 16 787 267.

The level of unemployment increased by 236 731 q/q (1 789 y/y), bringing the total number of unemployed individuals to 8 227 678. As a result, the official unemployment rate increased by 1.0-percentage point (ppt) to 32.9%. The absorption rate decreased by 0.8ppts to 40.3%, suggesting a moderate deterioration in the economy's ability to create jobs. At this rate, a significant proportion of the working-age population is still left out of the economy, emphasising the need for faster and labour-intensive growth.

Youth unemployment remains critically high. The jobless rate for the 15-24 age group stood at 62.4% in 1Q25 compared to 59.6% in 4Q24, while for the 25-34 age group it was 40.4% compared to 39.4%. Again, this data underscores the urgent need to accelerate pro-growth structural reforms to drive sustainable and inclusive economic expansion. The recent launch of Operation Vulindlela (OP) 2.0 under the Government of National Unity (GNU), and continued reforms from OP 1.0 in the broader network industries, is an appropriate intervention in the right direction.

Sectoral employment insights:

  • Public sector (formal): Employment in the community and social services sector declined by 98 476 q/q but reflected an increase of 37 771 y/y to 3 307 009.
  • Private sector: Jobs in the formal non-agricultural sector (excluding the formal public services) decreased by 146 760 q/q (and by 147 439 y/y) to 8 126 920, completely wiping out the 119 472 quarterly jobs created in 4Q24.

Large formal employment losses were recorded in wholesale and retail trade, motor trade, and hospitality (-133 341), followed by the construction sector (-79 438), mining sector (-40 858), and manufacturing sector (-39 503). In contrast, job gains were recorded in transport, storage and communication (+72 622), financial intermediation, insurance, real estate, and business services (+42 940), and electricity, gas, and water (+29 554).

The April inflation print is scheduled for release on 21 May. Major periodical surveys conducted in April include funeral expenses and insurance (1.48% weight in CPI).

  • Agricultural and informal sectors: Employment in agriculture increased slightly by 6 247 q/q but fell by 11 198 y/y to 930 192. Informal employment, a crucial source of income for many South Africans-but not a substitute for decent jobs-increased by 16 741 q/q (and by 263 601 y/y) to 3 345 201.
  • Private households: Employment in private households decreased by 68 326 q/q (and by 100 217 y/y) to 1 077 945, suggesting that households remain under pressure despite low inflation and modestly reduced monetary policy restrictiveness.

Outlook

The weak QLFS data for 1Q25 reflects subdued quarterly economic activity and suggests that the labour market remains structurally constrained amid weak economic growth and a persistently high youth unemployment rate. The near-term cyclical outlook for the labour market is clouded by elevated global uncertainty, including the impact of US trade tariffs. However, continued structural reforms should, over the medium term, support employment creation.

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