The Congress of SA Trade Unions expressed shock on Tuesday at the latest employment figures.
According to Statistics SA (Stats SA), unemployment rose from 23.9 percent to 25.2 percent for the first three months of the year.
"It is utterly demoralising to see that if this trend continues we shall not only fail to meet the government's target of creating five million new jobs between 2010 and 2020, but end up with a net loss of jobs over those ten years," Cosatu spokesman Patrick Craven said in a statement.
"This is further proof of the impact of the rapid casualisation of labour, which can lead to much bigger rises and falls in the unemployment rate."
He said the figures made Cosatu more determined to campaign for a significant cut in interest rates, to provide relief for employers struggling to avoid retrenching workers and as an incentive to those wanting to create new jobs.
"The focus must be on developing a new growth path that will defeat the three pre-eminent challenges facing our society -- high levels of unemployment, deepening poverty and growing inequality, and all the consequent social ills," Craven said.
"It is a challenge we dare not dodge. The consequences of failure are too terrible to contemplate."
The Democratic Alliance said the figures were a sign that South Africa's economy was not "performing optimally".
"At a structural level, many of the jobs created in the last year are in non-productive capacities such as the public service, DA MP Sej Motau said in a statement.
"Government employment is not the kind of work that creates sustainable momentum in an economy."
He said the DA had a "clear plan" to address unemployment, but it was ignored by the department of labour.
"Instead, it has chosen to propose a set of labour amendment bills that will likely do even more damage to employment opportunity," he said.
"Government must decide between appeasing Cosatu and actually serving South Africans."
The SA Chamber of Commerce and Industry (Sacci) also expressed concern over the latest unemployment figures.
"The figures indicate that South Africa urgently needs business-friendly regulations to improve the competitiveness of local business," said Sacci spokesman Neren Rau.
"Unfortunately, the current set of legislative amendments before parliament largely introduces additional costs and burdens to business that would ultimately reduce future sustainable employment creation."
Rau said short-term service contracts could be affected by proposed amendments to the Labour Relations Act and the Basic Conditions of Employment Act.
This would restrict opportunities to contain costs and retain operational flexibility.
Trade union Solidarity said it was disappointed that unemployment had continued to grow, despite a record increase in jobs last year.
Compared with three years ago, there were around 421,000 fewer jobs, said Paul Joubert, economics researcher at the Solidarity Research Institute.
"There are still roughly 421,000 fewer jobs compared with three years ago, at the start of the recession."
The number of South Africans of working age (15-64 years) grew by approximately 500,000 every year, he said.
Joubert said four out of ten South Africans looking for work were unable to find suitable employment.
Employment numbers dropped sharply in 2009, during the recession.
Since then, employment levels had remained virtually constant, despite an upswing in economic growth.