Bloomberg News

Swedish Unemployment Rose Less Than Estimated in September

October 20, 2011

(Updates with comment from analyst in third paragraph.)

Oct. 20 (Bloomberg) -- Swedish unemployment rose less than estimated in September as the central bank kept its benchmark interest rate unchanged amid slowing growth in the largest Nordic economy.

The non-seasonally adjusted unemployment rate, based on a survey of about 29,500 people, rose to 6.8 percent from 6.6 percent the prior month, Stockholm-based Statistics Sweden said today. The rate was 7.8 percent a year earlier. The median estimate of 15 economists surveyed by Bloomberg was for a 7 percent rate. Seasonally adjusted unemployment fell to 7.2 percent from 7.4 percent the previous month.

“The stronger labor market may make the Riksbank less apt to lower the repo rate forecast,” said Olle Holmgren, an analyst at SEB AB in Stockholm, in a note. “In 2012, unemployment will probably rise somewhat.”

Sweden’s central bank on Sept. 7 kept its key rate at 2 percent after seven increases from a record-low 0.25 percent in July last year. It raised its 2011 growth forecast to 4.5 percent, while lowering its expectations for future rate increases to an average 2.4 percent in the third quarter next year from an earlier forecast of 2.9 percent. It predicted the economy will slow to 1.7 percent next year, as exports will suffer from the global economic slowdown.

The krona strengthened 0.3 percent to 9.0981 per euro as of 10:30 a.m. in Stockholm. The currency climbed 0.1 percent to 6.6245 against the dollar.

Consumer Pessimism

Swedish consumer confidence fell to the lowest since June 2009 last month, while inflation expectations in 12 months fell to 2.3 percent from 2.5 percent. The central bank targets 2 percent inflation. Expectations about future unemployment has “worsened substantially in the last two months,” Sweden’s National Institute of Economic Research, which publishes the confidence readings, said last month.

There is “no doubt that the labor market has entered a clearly calmer phase,” said Anna Raman, a senior economist at Nykredit Bank A/S in Copenhagen, in a note, citing a slowdown in employment growth to 2 percent from more than 3.1 percent at the beginning of the year.

--Editors: Jonas Bergman

To contact the reporter on this story: Johan Carlstrom in Stockholm at jcarlstrom@bloomberg.net.

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net


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