Norway’s May registered unemployment in line with expectations; Norges Bank likely to cut rates in September

Norway’s registered jobless rate in May declined to 2.9%, on par with consensus expectations and below April’s rate of 3.1%. The drop was because of seasonality. Meanwhile, seasonally adjusted figures indicated a rise in the unemployed people by around 200, whereas the number of gross unemployed people rose by 900 in May. Meanwhile, the number of new job seekers has declined in recent months and has dropped to below 1000 people daily in May.

The drop in registered unemployment was in line with projections and because of seasonality. However, the effect on the Norwegian labor market from the weak economic growth looks to be small. Moreover, the increase in unemployment is more in the counties in Norway’s western part.

The Norwegian central bank, Norges Bank, is concentrating on unemployment, excluding those on labor market measures. The labor market in Norway is unlikely to improve unless the jobless people attend a training scheme, said Nordea Bank in a research report. The labor data today bolsters the case for a rate cut in September, added Nordea Bank.

“Rising unemployment, weak growth and lower inflation going forward, will make Norges Bank cut its key policy rate to 0.25% in September”, said DNB Market in a research report.