Sweden’s jobless rate drops in November, labor market strong for natives

Sweden’s jobless rate falls in November. The continued favorable development in Sweden’s economy continues to feed through in the labor market. Employment rose above expectations, whereas jobless rate dropped. However, there are several challenges to be faced in the coming years.

Seasonally adjusted jobless rate came in at 6.8 percent in November, a drop from October’s 6.9 percent. Consensus expectations were for 6.7 percent. Seasonally unadjusted unemployment rate dropped from 6.4 percent in October to 6.2 percent in November. This is in line with consensus expectation of 6.2 percent.

Meanwhile, employment was up considerably, rising by 74,000 people, and as a share of the population it reached the highest value in 15 years. The labor force supply also rose noticeably, rising by 78,000. The seasonally adjusted jobless rate is consistent with the Riksbank’s view. The central bank sees unemployment at 6.8 percent on average for the fourth quarter, noted Nordea Bank.

However, there are several labor market challenges ahead. The labor market for Swedish-born continues to be brighter than ever, but the situation for immigrants is quite bad, stated Nordea Bank. Long-term unemployment for Swedish-born and immigrants stands at 1 percent and 6 percent respectively.

The huge influx of refugees last year has not yet entered the statistics and implies that those would exert upward pressure on unemployment in the coming years. The government’s target of having the lowest unemployment in the European Union in 2020 would therefore hardly be met, according to Nordea Bank.