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Norwegian jobless rate continues to fall in June, housing prices rise sequentially
Norwegian registered unemployment came in slightly stronger than expectations in June. Jobless rate came in at 4.8 percent, as compared with consensus expectations of 4.9 percent. The unemployment rate had risen to nearly 11 percent in March from 2.3 percent. Since then, 70 percent of those who became fully laid off or unemployed are now back to work, noted Nordea Bank in a research report. The figures for unemployment are possibly the best indicator of the recovery of Norway’s economy, which has been faster and stronger than most anticipated.
Meanwhile, housing prices rose 1 percent sequentially in June after rising 1.6 percent in May. This signifies that housing prices, which dropped in March and April, are now 1 percent higher than before the corona lockdown.
“We have since long argued that the rate cuts from Norges Bank and the now record low interest rate have a strong effect on peoples buying-power in the housing market. With the economic recovery well underway, we are not surprised about the turnaround in the housing market”, said Nordea Bank.
Norges Bank had surprised the market three weeks ago by being the first central bank starting to think about hiking interest rate down the road. Their latest rate path suggests a first hike at the end of 2022. They also stated that “if output and employment rise faster than projected, or there are signs of accumulating financial imbalances, a policy rate rise may occur earlier than indicated”. The figures released today underpin and bolsters the slightly hawkish mood of Norges Bank, added Nordea Bank.