Swedish labor market weaker in August, jobless rate rises

Sweden published a surprisingly weak labor market report for the month of August. Unemployment increased in the month in the country as compared with the projections of a decline. Seasonally adjusted jobless rate came in at 7.2 percent in August, an increase from July’s 7.1 percent. Consensus expectation was for a decline to 6.8 percent. Meanwhile, employment was mainly unchanged over the year.

Seasonally unadjusted jobless rate also rose in the month to 6.6 percent, an increase from July’s 6.3 percent. Consensus projection was for the jobless rate to decline to 6.1 percent. Employment in the country dropped 1000 people. Labor force, on a year-on-year basis, rose 12,000.

But it is too soon to mention that the Swedish labor market has turned. Statistics Sweden highlighted that summer months are uncertain and that the surveyed weeks differs from the previous year, which possibly explains most of the weakness witnessed in August 2016, noted Nordea Bank.

Employment growth in the country is expected to drop as the economic growth has decelerated. But indicators continue to be positive and still indicate towards high demand for labor. Thus employment is expected to increase again in the near term, added Nordea Bank.