• Registered unemployment increased again
• Against our expectations, household credit growth increased in September
• Today’s figures confirm a slowing – but so far not more than forecast by Norges Bank
Registered unemployment increased by nearly 900 persons in October. This is in line with the trend. Norges Bank forecasts an increase in unemployment from 2012 to 2013 and so far the level of unemployment is well in line with Norges Bank’s forecast. But if the trend upwards continues into 2014 unemployment will end up higher than forecast.
The September data for credit growth showed that both household and corporate credit growth increased slightly. For some months we have seen signs of a slight decrease in household credit growth, but today’s figures did not fit in that picture. It now looks like household credit growth is stabilising around 7.2-7.3%. It takes time before a weaker housing market translates into lower credit growth, so going forward we expect stable and then very slowly decreasing household credit growth. Today’s household credit figures are well in line with Norges Bank’s forecast. Going into next year Norges Bank’s forecast is that household credit growth will increase to close to 8.0% y/y. In any case, household debt burden is set to increase further as credit growth continues to be higher than growth in disposable income. This should still make Norges Bank worried despite the cool-down in the housing market.
Norway manufacturing PMI increased in October leading to a stronger NOK. The indicator has not been a good indicator for manufacturing production and we would not give it much weight.
Today’s figures points in somewhat different directions. We give most weight to the unemployment figures. It confirms that growth is slower in mainland Norway. But so far not significantly more than Norges Bank’s forecast. Still we continue to believe 2014 will be weaker than Norges Bank’s forecast.
Details:
• October registered unemployment 89 200 persons (s.a. and including those on labour market measures) up from 88 318. Nordea was 89 300 (no consensus).
• The unadjusted rate 2.5% in line with our forecast and consensus.
• Total credit growth 6.2% y/y, up from 6.1%. Consensus 6.0% and Nordea 6.1%
• Household credit growth 7.3% y/y, up from 7.2%
• Corporate credit growth 4.0% y/y, up from 3.8%
• PMI 53.6 up from52.3. Consensus 52.7
Nordea