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Swedish jobless rate remains unchanged at 7.4 pct in September, wage growth unlikely to pick up soon
Swedish jobless rate came in above expectations in September. On a seasonally adjusted basis, the unemployment rate remained at 7.4 percent, as compared with consensus expectations of 7 percent. Employment rebounded slightly on the month and labor supply rose. Statistics Sweden indicates increased uncertainty in the LFS.
Employment rose 0.6 percent sequentially, whereas it dropped 0.2 percent year-on-year. The labor supply rose 0.6 percent sequentially, explaining the surprise in unemployment. The data released today affirms that the Swedish labor market is in a noticeably softer phase. Statistics Sweden revised previous outcomes and some uncertainties remain. Unemployment in the first half of 2019 was upwardly revised, while they think today’s number might be slightly too high. Moreover, the fall in employment might be exaggerated, as they judge employment to have shown overly solid figures in the second half of 2018, said Nordea Bank in a research report.
However, the jobless trend has been gloomy in 2019, and indicators imply that this trend might continue throughout the fall and winter. Risks on the labor market are still very much skewed to the downside.
“Today’s reading also reinforces our view that wage growth won’t pick up anytime soon, adding pressure on the Riksbank. They will have to review their stance of "a strong labour market” in their October report on the back of weak outcomes and gloomy indicators”, added Nordea Bank.