Norway's unemployment rate increases as expected

The LFS unemployment seems to be levelling out after a sharp rise the last year. That is in line with Norges Bank's view

LFS unemployment rate in October was 4.6%, unchanged from last month and in line with consensus and forecast. Measured in persons however unemployment increased by 2000.

Even if it seems that the sharp rise in LFS unemployment the last year have leveled out, the LFS unemployment provides an impression of a sharp decline of the Norwegian labour market. The rate is now 0.8%points above October last year. Employment is however growing at a healthy 0.8% y/y, but that does not help when supply is up by as much as 1.7% y/y.

"The sharp increase in supply is helped by rise in labour force participation. We suspect this to be statistical noise (LFS is a sample survey). At least, rising participation rates and not that bad employment growth is hard to characterize as sharp deterioration of the labour market", says Nordea Bank.