South Africa’s official unemployment rate edged lower in the fourth quarter of 2025, continuing a recent easing trend that suggests the labour market may be stabilisingeven if the picture is more complicated than the headline figure suggests.
According to the Quarterly Labour Force Survey released on Tuesday, the unemployment rate fell to 31.4% from 31.9% in the third quarter. The number of unemployed South Africans decreased by 172,000 to 7.8 million.
At face value, the data points to steady progress. But beneath the surface, the dynamics are more nuanced.
A Shrinking Labour Force
While employment increased by 44,000 people, reaching 17.1 million South Africans in jobs, the labour force itself shrank by 128,000. At the same time, the number of people classified as outside the labour force rose by 248,000.
This combination suggests that part of the decline in unemployment was driven by fewer people actively participating in the labour marketa phenomenon that masks continued discouragement among work-seekers.
The labour force participation rate slipped to 59.3% during the quarter, highlighting the persistent presence of those who have given up looking for work.
Incremental Progress, Not Transformation
Nolan Wapenaar, co-chief investment officer at Anchor Capital, described the decline as “incremental rather than transformative.”
“Still, it confirms that employment momentum has stabilised after a weak start to 2025, and broad-based participation suggests the recovery is not confined to a single industry, improving the quality of the improvement,” he said.
Sectoral data supports that view. Seven of ten industries recorded employment gains, with community and social services, construction, and finance leading the increases. Agriculture also posted gains.
But there were significant pressure points. Manufacturing shed 61,000 jobs over the quarter, while trade and mining also recorded losses. Manufacturing remains one of the most significant drags on job creation.
Provincial Disparities
The recovery is also geographically uneven. The Western Cape added 93,000 jobsthe strongest performance nationallywhile Gauteng recorded a decline of 54,000. KwaZulu-Natal and the Eastern Cape also saw employment contract.
These disparities reflect underlying differences in economic structure, industry mix, and local conditions.
Youth Still Left Behind
Despite the modest improvement, joblessness continues to disproportionately affect vulnerable groups, particularly the young and long-term unemployed.
While unemployment among those aged 15 to 24 improved slightly during the quarter, Statistics South Africa’s data shows that 34% of young people remain not in employment, education, or traininga deterioration compared with a year earlier.
Lara Hodes, economist at Investec, noted that “vulnerable youth, comprising those aged 15 to 24, remain the most disadvantaged segment when it comes to finding sustainable employment.”
President Cyril Ramaphosa acknowledged the challenge in his recent State of the Nation Address, stating that “it is a matter of national concern that too many South Africans remain unemployed, and too many young people struggle to find their first job.”
He pointed to public and social employment programmes as part of the response, arguing that “as the economy grows, the rate of unemployment is starting to decline.”
The Bottom Line
Wapenaar’s assessment captures the mood: “While the labour market remains weak, at least it is no longer deteriorating.”
That is cold comfort for the millions still jobless, and for the young people entering a market that offers them little. But in an economy that has seen relentless bad news on employment, stabilisation is, for now, the best on offer.
The question is whether 2026 can turn stabilisation into genuine recoveryand whether the jobs lost in manufacturing, trade, and mining can be replaced by growth in other sectors. The data offers hope, but only incremental hope, and only for those still in the game.
