Norwegian unemployment unlikely to have changed in November, retail sales to have dropped in October

Norwegian labor market data for the month of November is set to release next week. According to a Nordea Bank research report, a sideways movement in registered unemployment is expected. The seasonally adjusted figures are expected to show no change in unemployment. This view is consistent with Norges Bank.

The figures for registered unemployment are important for Norges Bank’s view of the labor market and therefore of high significance for interest rates. After falling sharply through 2018, the downward trend in joblessness has decelerated and moved relatively sideways since April.

“We know that employment still grows at a healthy pace, but it seems it is difficult to reduce unemployment further down from the current level. Hence, we forecast unemployment to move sideways in November. In this case, registered unemployment will be close to Norges Bank’s forecast and should not have any impact on the coming interest rate path in December”, said Nordea Bank.

Meanwhile, the retail sales data for the month of October is also set to release next week. According to Nordea Bank, retail sales are likely to have dropped a bit by 0.5 percent sequentially in the month, as consumers have postponed some of their purchases to November so as to benefit from Back Friday sales. Since Black Friday is a comparatively new phenomenon in Norway, this seasonal effect has possibly not yet been fully reflected in the seasonal adjustment of the data.

“If we are right, retail sales will point to a rather weak development during the past months. However, this figure is volatile and will probably not be given much weight when the December rate path is made”, added Nordea Bank.