Unemployment Rate Jumps from 16.2% in Q2 2017 to 18.8% in Q3 2017

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Between January and September this year, a total number of 4.07 million Nigerians became unemployed bringing the Unemployment Rate to 18.8% in Q3 2017 from 16.2% in Q2 2017, an analysis of the unemployment report for the third quarter released by the National Bureau of Statistics has revealed.

The bureau in the report, made available to Brand Spur Nigeria on Friday, stated that the number of Nigerians that became unemployed rose from 11.92 million in the first quarter of this year to 13.58 million and 15.99 million in the second and third quarters respectively.

It said Nigeria’s economic growth has been decelerating since Q2 2014 culminating in an economic recession in Q2 2016. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country’s gross domestic product (GDP). The economic recession was technically over in Q2 2017. However, several economic activities are still contracting or recovering sub-optimally. An economic recession is consistent with an increase in unemployment as jobs are lost and new jobs creation is stalled.
The NBS report said a return to economic growth provides an impetus to employment. However, employment growth may lag, and unemployment rates worsen especially at the end of a recession and for many months after. The unemployment rate, induced by a recession, typically peaks about 15-18 months after the beginning of a recession or 4-8 months after the end of a recession before it returns to its pre-recession trend. This, in the case of Nigeria, will be a peak in Q4 2017 which means we will only expect unemployment to return to its normal trend in 2018. The length of the lag depends on how deep and long the recession was. It also depends on how stable and fast the recovery is as well as on the economic sectors diving the recovery (labor or capital/technology intensive).
The economically active or working-age population (15 – 64 years of age) increased from 110.3 million in Q2 2017 to 111.1 million in Q3 2017. The labor force population increased from 83.9 million in Q2 2017 to 85.1 million in Q3 2017. The total number of people in full-time employment (at least 40 hours a week) declined from 52.7 million in Q2 2017 to 51.1 million in Q3 2017 (A loss in full time employed workers may not necessarily be due to job losses. It may also be due to people choosing to work fewer hours hence becoming underemployed or people like intending students or new mothers choosing to leave full-time employment entirely or temporarily.
The NBS noted in the report that the unemployment rate increased from 14.2% in Q4 2016 to 16.2% in Q2 2017 and 18.8% in Q3 2017. The number of people within the labor force who are unemployed or underemployed increased from 13.6 million and 17.7 million respectively in Q2 2017, to 15.9 million and 18.0 million in Q3 2017. Total unemployment and underemployment combined increased from 37.2% in the previous quarter to 40.0% in Q3 2017.  
During the quarter Q3 2017, 21.2% of women within the labor force (aged 15-64 and willing, able, and actively seeking work) were unemployed, compared with 16.5% of men within the same period. In Q3 2017, 16.4% of rural and 23.4% of urban dwellers within the labor force were unemployed and unemployment is increasing at a slightly faster rate for urban dwellers than it is for their rural counterparts. Underemployment is predominant in the rural areas (26.9% of rural residents within the labor force in Q3 2017), are underemployed (engaged in work for less than 20 hours a week); compared to 9% of urban residents within the same period.
For the period under review, Q3, 2017, the unemployment rate for young people stood at 33.1% for those aged 15 to 24, and 20.2% for those aged 25 to 34.
Underemployment within the same quarter rose slightly amongst the 25 to 34 age group from 22.2% in Q2 2017 to 22.3% in Q3 2017 and declined slightly amongst the 15 to 24 age group from 35.1% in Q2 2017 to 34.2% in Q3 2017.  As of Q3 2017, 67.3% of young people aged 15-24 years were either underemployed (engaged in work for less than 20 hours a week or low skilled work not commensurate with their skills and qualifications) or unemployed (have no work at all but willing and actively seeking to work), compared to 64.6% in the previous quarter. 
The combined underemployment plus unemployment rate for the 25 to 34-year age group stood at 42.5% within the quarter under review, compared with 39.6% in the previous quarter. Combined unemployment and underemployment rate for the entire youth labor force (15-35 years) was 52.65% or 22.64 million (10.96 million unemployed and another 11.68 million underemployed), compared to 45.65% in Q3 2016, 47.41% in Q4 2016 and 49.70% in Q3 2017. Unemployment tends to be higher for people within the labor force that have post-secondary school qualifications (31.8% unemployment rate and 50.0% combined unemployment and underemployment in Q3 2017). Graduates tend to prefer fewer in supply white collar jobs rather than often rural, seasonal and low skilled and lower paying blue-collar jobs that are more in supply. 
Unemployment and Underemployment rates vary according to the nature of economic activity predominant in the State. States with the higher focus on seasonal agriculture tend to have higher rates of underemployment compared to unemployment and may swing from high fulltime employment during periods of planting and harvest when they are fully engaged on their farms to periods of underemployment and even unemployment at other periods in between. 
States with the higher propensity of women to marry early or be housewives and hence will not be considered part of the labor force also tend to have lower unemployment rates. These States tend to have a higher proportion of their economically active populations outside the labor force thereby reducing the number looking for work and hence the number that can be unemployed. 
While inter state unemployment and underemployment rates to determine performance is not advised due to the effect on migration on any States level at any point (people can move from one state t another in search of employment thereby increasing the rate in the destination State and reducing the rate in the State thy left from), nevertheless, in Q3 2017, Rivers state reported the highest unemployment rate (41.82%) followed by Akwa-Ibom (36.58%), Bayelsa state (30.36%), and Imo state (29.47%) while Katsina, Jigawa, Gombe,  and Yobe, recorded the highest underemployment rates during the reviewing period, of 46.19%, 43.01%, 38.38%,  and respectively. 

2017 Q3 Unemployment and Underemployment Statistics 

 

 

 

 

 

 

 

 

 

 

 

 

The economically active or working-age population (15 – 64 years of age) increased from 108.03 million in Q3 2016 and 108.5 million in Q4 2016 to 110.3 million in Q2 2017 and 111.1 million in Q3 2017.  This represents a 0.8% growth over the previous quarter and a 2.8% growth over the same period in 2016.  The labor force population followed a similar growth trend, increasing from 80.66 million in Q3 2016  and 81.15 million in Q4 2016 to 83.9 million in Q2 2017 and 85.1 million in Q3 2017. 

However, the labor force grew at a slighter faster rate than the working age population, recording a growth of 1.3% from Q2 2017 to Q3 2017, and a growth of 5.2% over Q3 2016.

In absolute terms, 847,000 people joined the working age population in Q3 2017 while 1.2 million people joined the labor force within the same period.  The difference between these figures indicates that 301,000 people of working age and previously outside the labor force population (unwilling/unable/not actively seeking to work), decided to join the labor force (i.e. to actively seek work) in Q3 2017.

Consequently, the labor force participation rate grew by 0.5 percentage points between Q2 2017 and Q3 2017, and by 2 percentage points between Q3 2017 and the same period last year.  With the working age population at 111.1 million and the labor force at 85.1 million in Q3 2017, 26.4 million people within the working age population were unwilling, unable, or not actively seeking work, and are thus not included in the unemployment rate calculation. 

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