Registered unemployment is one of Norges Bank favorite measure for the output gap. As long as registered unemployment is increasing in line with Norges Bank's forecast, the signs of weaker than expected growth through 2015 will not matter. It is not growth per see, but its impact on capacity utilization (output gap) which counts.
Data released earlier today showed that Norway's registered unemployment (including labour market measures) increased by 100 persons in February. Consensus was for an increase by about 1000 persons. The unadjusted rate was 3.3% in line with consensus.
If we keep out those on labour market measures the increase in unemployment was 300 persons. This is the figure Norges Bank forecasts and data received since December is very close to the central bank's forecast.
"Norges Bank will cut rates in March and lower the interest rate path. But today's figure is no argument for a lowering of the rate path" said Nordea Bank in a report.
