The higher unemployment figure was an effect of increasing labour supply while employment stayed flat over the month. We had expected an increase by 0.4% m/m in both employment and labour supply. Thus, the negative surprise in today’s figures origin from lower employment than expected.
The pick-up in unemployment stands in contrast to the previously released figures from the Swedish Public Employment Service (SPES) which showed a decline in January. Also, indicators in general point to an improvement rather than a deterioration of the labour market. Statistics Sweden also stresses uncertainty as regards the most recent LFS figures. In December, the response rate was low and in January they had difficulties with the seasonal adjustment due to unusual many holidays.
Overall, we therefore don’t see the most recent figures as a beginning of a new negative labour market trend. On the contrary, we foresee a gradual improvement of the labour market during the course of the year.
Details, January Labour Force Survey
Unemployment, seasonally adj.: 8.2 % (Nordea 7.9%; consensus 7.9%; prior 8.0 %)
Unemployment: 8.6% (Nordea 8.2%; consensus 8.3%; prior 7.5%)
Employment y/y: 41 k people (Nordea 70k; prior 33 k)
Labour force y/y: 57 k people (Nordea 70k; prior 31k)
Nordea