Swedish jobless rate rises in December, exports continue to grow

Swedish jobless rate increased in December. On a seasonally unadjusted basis, the jobless rate rose to 6.5 percent in the month from 6.2 percent in the prior month. Consensus expectations were for the rate to rise to 6.3 percent. On a seasonally adjusted basis, the unemployment rate remained at 6.9 percent, as compared with market expectations of 6.8 percent.

Both labor supply and employment came in slightly weaker than expected. Still the labor market development is regarded as well in line with the view of Riksbank. The bank projects joblessness to drop only slowly from here, bottoming out at 6.7 percent later in 2017, noted Nordea Bank. In spite of a setback in December, the continued favorable development in Sweden’s economy keeps feeding into the labor market, stated Nordea Bank.

Elsewhere, trade figures indicated that Sweden’s imports and exports continue to expand. But calendar effect is expected to have mostly boosted figures. Short-term indicators of exports continue to be positive. At current prices, exports of goods grew 11 percent year-on-year in December, whereas imports rose 15 percent. Trade balance came in at a surplus of SEK 1 billion.

Meanwhile, Swedish producer prices continue to increase noticeably. Overall producer prices were up 6.5 percent, the highest in ten years. Increased energy prices and the earlier depreciation of the SEK drove the rise in producer prices. Most of this implies that the price growth at the producer level is likely to peak soon.

“Looking at the import prices of consumption goods they follow closely SEK developments and should the krona just stay at current levels the inflation of import prices will fade away in upcoming months”, added Nordea Bank.

Overall, today’s figures underpin the central bank’s view that the economy continues to perform decently and that resource utilization is rising.