South Africa’s unemployment rate declined to its lowest level in more than five years in the fourth quarter, defying concerns that a 30 percent US tariff would trigger widespread job losses in Africa’s most industrialised economy.
The joblessness rate eased for a second consecutive quarter to 31.4 percent in Q4 2025, from 31.9 percent in the preceding quarter, according to data released Tuesday by Statistics South Africa (Stats SA). The agency attributed the improvement largely to job gains in the community and social services as well as construction sectors.
The drop offers rare relief in South Africa’s prolonged unemployment crisis, with the rate having remained above 30 percent since the COVID-19 shock in 2020. Stats SA reported that the number of unemployed people fell by 172,000 to 7.8 million, while employment rose by 44,000 to 17.1 million. Over the same period, the labour force declined by 128,000 to 24.9 million.
“The working-age population grew by 120,000 compared with the third quarter. During the same period, the number of employed individuals increased by 44,000 to reach 17.1 million, while the number of unemployed persons declined by 172,000 to 7.8 million. Consequently, the labour force decreased by 128,000 between Q3 and Q4,” Stats SA said in its labour report.
Formal, informal and household sectors employed 12.3 million, 3.7 million and 1.1 million people respectively. Between the third and fourth quarters last year, the number of individuals outside the labour force increased by 248,000, driven by a rise of 165,000 among those classified as other non-participants and an 82,000 increase in the potential labour force.
Available potential job-seekers rose by 123,000, while unavailable job-seekers declined by 41,000, resulting in a net increase of 82,000 in the potential labour force. Within the available group, discouraged job-seekers climbed by 233,000, offsetting a decline of 110,000 in other available job-seekers.
The labour market resilience comes despite heightened trade tensions following the imposition of the United States’ tariffs in August, South Africa’s 30 percent levy placed it among the highest-tariffed countries globally.
The US is South Africa’s third-largest trading partner, accounting for 7.5 percent of total exports, behind China (11 percent) and the European Union (17 percent). Analysts had expected the automotive and agricultural sectors to face the greatest exposure.
Before the tariffs took effect, the South African Reserve Bank and industry groups warned that it could threaten between 30,000 and 100,000 jobs if poorly managed.
“At this stage, approximately 30,000 jobs could be affected if the situation is mismanaged,” said Simphiwe Hamilton, director-general of the Department of Trade, Industry and Competition.
Labour unions also cautioned that prolonged tariff pressure could accelerate deindustrialisation and retrenchments across key sectors, including manufacturing, mining and agriculture.