Why did the #unemploymentrate fall, while 2.2mil lost their #jobs in Q2? And why did the number of unemployed people fall? @StatsSA /1
The working age population comprises the employed, the unemployed and the economically non-active (e.g. students, people preferring not to work - they don't have a job, but are also not unemployed). 2/
According to the official definition of unemployed, to be classified as unemployed you must be actively searching for work. 3/
However, with lockdown many of the 2.2mil people who lost their jobs in Q2 and many of the 7mil who were already unemployed in Q1 (before Covid-19), were not able to actively search for jobs. 4/
They were therefore classified as 'Not economically active', a category that increased by 5.2mil people in Q2. So the drop in the unemployment rate is an artifact of the fact that so many people who lost their jobs and so many of the unemployed could not search for work. 5/
As the economy open up in the Q3 and Q4, those people will be able to start looking for jobs. If a large proportion of the 2.2mil who lost their jobs in Q2 don't find jobs, the number of unemployed might exceed the 7 million of Q1. 6/
For instance, if the labour force again comprises 23.5mil (as in Q1), but the number of unemployed goes to 8mil, the unemployment rate will go to 34%. 7/
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