South Africa's unemployment rate fell to 25% in the second quarter, after spiking to a multi-year high of 26.4% in the preceding quarter, Statistics South Africa’s Quarterly Labour Force Survey showed. The outcome surprised analysts, who had expected the jobless rate to edge up to 26.6% in view of the subdued economic growth climate and depressed business confidence, according to a Business Day survey.

A total of 5.23mn South Africans were unemployed in Q2, down from 5.535mn in Q1. In Q2 2014, the country’s jobless rate was 25.5% and the number of unemployed was 5.154mn.

At the same time, the number of employed people increased by 198,000 q/q and by 563,000 y/y to 15.657mn in Q2. The formal sector accounted for the largest share of employment at 69.2% (down from 69.8% in Q1), while agriculture accounted for the lowest share at 5.6% (down from 5.8% in Q1). The share of the informal sector (non-agricultural) increased to 17% from 16.1% in Q1, as it added the largest number of employees – 177,000.

The labour force equalled 20.887mn in Q2, down by 107,000 q/q, but up by 639,000 y/y. At the same time, the number of not economically active people rose by 263,000 q/q to 15.068mn, but was by 16,000 lower y/y. Around 16% of them were accounted for by the discouraged, while more than 80% were due to other reasons (i.e. student, home-maker etc.).

The expanded definition of unemployment, which includes people who have stopped looking for work, declined to 34.9% in Q2 from 36.1% in Q1 and 35.6% in Q2 2014.

The high unemployment is one of the major problems for Africa’s best developed economy and presents a major risk to the stability of the financial system, as well as to the economy’s future growth.