Swedish wages rise below expectations in October, likely to pickup in coming years

Swedish wages continued to disappoint. Wages rose below projections. On a year-on-year basis, wages rose 2.4 percent in October, whereas the figures for previous months were downwardly revised a bit. Nordea Bank had expected a rise of 2.5 percent. Even if the labor market is tight and the economy has been booming, the wages haven’t picked up. In the earlier economic upturns, wages are seen rising around 4.5 percent to 5 percent year-on-year.

This year, wage rises in the municipality sector have dropped since prior wage rises for nurses and teachers have levered off. Meanwhile, wages have risen in the business sector. It is mainly in the industry and the construction sector that wages have risen in 2018.

“Going forward we find it hard to believe that wages will pick up at the pace of the Riksbank forecast: 2.8 percent y/y and 3.2 percent y/y in 2019 and 2020”, stated Nordea Bank.

The Swedish and the global economy are decelerating, at a higher and a more considerable rate than anticipated earlier. Wages are lagging and might pick up slightly in the years ahead but most likely not to the levels the Riksbank is estimating, said Nordea Bank.

The Swedish and the global economy are slowing, at a higher and a more significant pace than previously expected. Wages are lagging and could pick up somewhat in the coming years but most likely not to the levels the Riksbank is estimating.