Sweden: Unemployment at two-and-half year low

The December Labour Force Survey shows that unemployment fell to 7.6% from 7.8% in November, the lowest reading since April 2012. This was lower than expected. Forecasts were for unemployment being unchanged at 7.8%.

Unemployment was 7.81% for Q4, well in line with the Riksbank’s view at 7.85%.

Employment came out in line with our view at -0.1% m/m and 1.8% y/y. The lower than expected unemployment reading is explained by labour supply slipping more than forecast at -0.3% m/m (our call was -0.1%).

Employment growth has dampened somewhat in recent months, and employment was unchanged in Q4 from the previous quarter after rising by a full 0.8% in Q3. We see no reason to worry, though. Employment is volatile and indicators suggest that employment growth will accelerate in the coming months.

All in all, looking through the volatility in the survey, labour market trends remain strong and much suggests that the upturn will continue. Unemployment is gradually falling, in line with the Riksbank’s view. Today’s figures don’t change much for the Riksbank. Instead focus is on inflation, and on the ECB actions that will be announced this afternoon.

Details, December Labour Force Survey
Unemployment, seasonally adj.*: 7.6% (Nordea & consensus 7.8%; prior 7.8% %)
Unemployment: 7.0% (Nordea & consensus 7.4%; prior 7.4%)
Employment y/y: 83k people (Nordea 90k; prior 81k)
Labour force y/y: 63k people (Nordea 89k; prior 79k)