Swedish jobless rate rose in the month of November, coming in above expectations. Unemployment rose to 7.3 percent due to surprisingly high labour supply. The numbers are noisy but imply that the situation on the labour market is weakening, noted Nordea Bank in a research report.
Employment rose slightly on the month by 0.1 percent and 0.9 percent year-on-year. The big surprise was the labour supply that rose 0.8 percent on the month.
The sample size in the Swedish Labour Force Survey has been cut in half because of issues earlier in 2019. In October, the numbers were revised from July 2018 and onwards. Thus the new data is quite noisy, and the monthly figures should be seen as flash indicators for the more reliable quarterly figures. In the third quarter, jobless rate stood at 7 percent.
Other data sources showed that registered unemployment rate came in at 7.2 percent. Registered unemployment is rising, implying that LFS unemployment should be rising as well. The number of registered jobs is falling a bit, according to Statistics Sweden. Going forward, most indicators point to a continued fall in the labour market.
“All in all, today’s LFS reading confirms that the situation on the labour market is weakening. However, the reading did not deviate enough to affect the Riksbank and its planned rate hike in December. More likely, they will stress that high labour supply is the main explanation for rising unemployment and that the employment rate is rising”, added Nordea Bank.
