PRESIDENT Jacob Zuma's goal of creating 500000 jobs by the end of this year will not materialise since the effects of the economic recession are still felt in the labour market, an economist said yesterday.

The rate of unemployment increased by 0,5percent in the second quarter to 23,6percent from 23,5percent in the first quarter, Stats SA said in its Quarterly Labour Force Survey.

The number of people employed decreased by 325000 from 17,8million in the first quarter to 17,5million in the second quarter. This translates to a 2percent decrease.

The expanded unemployment figure, which includes those who have given up seeking work, rose from 31,2percent to 32,5percent.

Economist Dawie Roodt said the increase in unemployment was expected considering the economic climate.

He said even when the economy starts to improve it will take a while before the employment rate picks up.

"Government's job creation targets need divine intervention to happen. Unless the government employs 500000 people to dig a hole and another 500000 to fill it up," Roodt said.

He forecast that employment figures will increase by the second and third quarters of 2010.

Cosatu said it was "seriously concerned at the news of yet another increase in the number of people unemployed".

"All policies, from the government, business and labour - and the Reserve Bank - must prioritise saving and creating new jobs.

"This includes policy on economic development, tariffs, interest rates, the expanded public works programme, community service delivery, rural development.

"They must all now focus on measures to end the job loss bloodbath and create decent jobs," Cosatu said.

The year-on-year comparisons showed that the trade sector lost 143000 jobs, followed by 95000 in manufacturing and agriculture with 80000 retrenchments.