South Africa’s exchange traded funds (ETFs) are dancing on reports of a lower jobless rate.
In the second quarter, the country’s unemployment rate fell to 23.1% and economic growth rebounded from a six-year low, reports Nasreen Seria for Bloomberg. Economic expansion hit an annualized 4.9%, up from 2.1% in the previous three months.
Employment within the mining sector rose the highest, by 3.9%, while transportation industry employment rose 3.6%. Unfortunately, Africa’s largest economy hasn’t increased jobs at a fast enough pace to slash unemployment, which has led to a rise in both poverty and crime. Skilled workers are in short supply, as well, making the government’s goal of slashing unemployment to 14% by 2014 a tough one to attain.
Inflation remains high: it hit 13% in July, up from 11.6% in June.
The rand is also up against the U.S. dollar for the second consecutive day. A weaker dollar helped lift demand for precious metals. South Africa produces 80% of the world’s platinum and 10% of the world’s gold, which tends to cause the rand to move in tandem with metals, report Mike Cohen and Garth Theunissen for Bloomberg.
- NETS FTSE/JSE Top 40 Index (JNB), down 18.1% since May 22 inception
- iShares MSCI South Africa (EZA), down 16.4% year-to-date
- WisdomTree Dreyfus South African Rand (SZR), down 1.1% since July 8 inception
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