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Swedish jobless rate drops in March, employment rises strongly in Q1

Employment in Sweden rose strongly in the first quarter of 2017. It rose 1 percent sequentially, coming in above the Riksbank’s projection. The seasonally adjusted jobless rate dropped to 6.4 percent in March, much below the consensus projection of 6.8 percent. The jobless rate in February was 6.8 percent.

The 6.4 percent rate is the lowest level since October 2008. In the first quarter of 2017, the jobless rate averaged 6.6 percent, 0.2 percentage point below the central bank’s view, as employment was up more than the bank’s projections. On a seasonally unadjusted basis, the jobless rate dropped to 6.8 percent in March from 7.4 percent in February. Consensus expectations were for the rate to drop to 7.3 percent.

On a month-on-month basis, the Swedish employment rose 0.3 percent in March. The rise was after the sharp upturn recorded in January and February. Meanwhile the labor supply dropped on the month in March.

The robust trend of employment highlights the present strong growth momentum in Sweden’s economy. So far, the Swedish central bank has ignored the high resource utilization, and might continue to do so as inflation stays a long-term challenge, noted Nordea Bank in a research report.

Meanwhile, the benchmark for wage agreements has been set for the coming three years with no acceleration in pay rises. The total wage rises are not expected to be enough for inflation to stabilize at the target rate of 2 percent, stated Nordea Bank.

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