Norway’s jobless rate rises more than expectations in July

Norway’s number of unemployed persons increased to 139,000, seasonally adjusted. This corresponds to 5 percent of the labor force, according to Statistics Norway. According to the Labor Force Survey (LFS), the seasonally adjusted number of unemployed persons aged 15-74 increased by 11,000 from April to July 2016. For the subpopulation aged 25-74, the LFS indicated a rise of 12,000 in the number of unemployed persons.

LFS jobless rate was up by 0.2 percentage point to 5 percent in July, as compared with consensus expectations of 4.8 percent. From April, unemployment rose 0.4 percentage points. From June to July, employment rose by 7000 after increasing by 5000 from May to June. From the previous three months, employment rose 5000. These figures have fluctuated on a monthly basis; however, the level in July is around average in the past year.

The jobless rate was up more than projected in July. The report published today underpins the view that the nation’s labor market continues to weaken, said DNB Markets. LFS figures continue to show a weaker scenario of the Norwegian labor market than the registered unemployment figures from the labor market office.

Even if current figures indicate an increase in employment last month, the development in employment is quite weak in a slightly longer perspective with the number of employed more or less unchanged since late 2014. LFS unemployment is expected to come in slightly higher than the Norges Bank’s June estimate for the whole of 2016, noted DBS Market.

Economic growth seems to be rebounding, while inflation has surprised on the upside. Also, house price inflation has accelerated. Thus, the Norges Bank is expected to keep its key policy rate on hold during its meeting tomorrow, despite solid signals in June for rate cut this autumn, added DBS Bank.