South Africa’s unemployment rate improves, with some big changes to the data

South Africa’s unemployment rate has decreased by 1.3 percentage points in the third quarter of the year, moving to 31.9% from 33.2% in the second quarter.

However, Stats SA, which compiled the data, has made changes to certain definitions and the way it collates the data outside of the standard unemployment rate, which gives different views of the labour market.

This specifically relates to the “Not Economically Active” population (used for the expanded unemployment rate), which has been changed to reflect numbers “Outside the Labour Force” with additional terms on “Potential labour force”.

Those outside the labour force are persons aged 15–64 years who are neither employed nor unemployed in the reference period.

The potential labour force includes persons who are not in the labour force, but are either available for work but not actively seeking employment or actively seeking employment but not currently available to work.

As a result of these changes, the Q3:3025 estimates on informal employment in particular cannot be compared to the previous estimates, Stats SA.

According to the Quarterly Labour Force Survey (QLFS) for Q3, there was an increase of 248,000 in the number of employed persons to 17.1 million.

Overall there was a reduction of 360,000 in the number of unemployed persons to 8.0 million, pointing to a decrease of 112,000 (0.4%) in the labour force when comparing Q2 and Q3.

Some of this reduction is attributed to discouraged job seekers, which increased by 36,000 to 3.5 million people.

Other available jobseekers increased by 130,000 to 965,000, and unavailable jobseekers increased by 64,000 to 83,000, resulting in a total net increase of 230,000 to 4,5 million in the potential labour force population.

Those outside the labour force (previously “other not economically active population”) increased by 8,000 to 12.4 million.

The above changes in employment and unemployment resulted in the official unemployment rate decreasing by 1.3 percentage points from 33.2% in the second quarter of 2025 to 31.9% in the third quarter of 2025.

In addition to the unemployment rate, Stats SA has now recommended the use of other measures to determine labour underutilisation.

This refers to mismatches between labour supply and demand, which translates into an unmet need for employment among the population.

This measure includes time-related underemployment, unemployment, and the potential labour force.

Time-related underemployment refers to the number of employed persons whose hours of work in the period are insufficient in relation to a more desirable employment situation in which they are willing and available to engage.

The combined rate of unemployment and time-related underemployment decreased by 1.2 percentage points to 34.9%.

The combined rate of unemployment and potential labour force decreased by 0.6 of a percentage point to 42.4% in the third quarter compared with the second quarter of 2025.

Lastly, the composite measure of labour underutilisation—combining all measures, forming the expanded definition—was 44.9% in the third quarter of 2025.

The rate that is being tracked and tracks closely to the previous expanded unemployment rate is the combined rate of unemploymnet and potential labour force, at 42.4%.

“These labour underutilisation measures highlight people in different situations and with different degrees of attachment to the labour market,” Stats SA said.