Unemployment figure expected to climb to 34% in the second quarter

Unemployment 2 R - Unemployment figure expected to climb to 34% in the second quarter

Founder of Economist.co.za Mike Schussler says the unemployment figure is expected to climb to 34% in the second quarter, from 30.1% in the first quarter of 2020.

On Tuesday, Statistics South Africa is expected to release the much-anticipated job numbers for the second quarter of 2020 following a month of postponements.

The expected increase in the unemployment rate is attributed to the hard lockdown government implemented from March in an effort to arrest the spread of the coronavirus.

Schussler says an even larger increase on unemployment can be expected in 2021.

“Unemployment is always a lagging indicator. A business has a problem. They don’t make their income, they try to keep you. Especially when you’ve got these extra UIF pay-outs, they’ll try to keep you but the business doesn’t turn around, that means 4/5 months later you only lose you job. That’s the first thing. The second thing is that every year we get about 600 000 new people entering the job market, and obviously, next year in the first quarter, we will see those people and they will  struggle to find jobs in the beginning.”

Unemployment is expected to have worsened in the second quarter:

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