Bloomberg News

Swedish Retail Sales Unexpectedly Rise for Second Month

December 29, 2011

(Updates with comment from analyst in third paragraph, krona in fifth.)

Dec. 28 (Bloomberg) -- Swedish retail sales unexpectedly rose for a second consecutive month in November as unemployment declined.

Seasonally adjusted sales gained a monthly 0.8 percent, after rising 0.4 percent the prior month, Stockholm-based Statistics Sweden said today. The median estimate of five economists surveyed by Bloomberg was for a 0.3 percent drop. Sales increased an annual 0.7 percent and dropped a revised 0.6 percent in October.

“The outlook for 2012 is unfortunately not that upbeat,” said Mikael Sarwe, an analyst at Nordea Bank AB, in a note. “A slowing labour market will weigh on household income and fiscal policy will not provide support.”

Swedish consumer confidence this month held near the lowest since 2009 as European leaders struggle to contain the region’s debt crisis. Unemployment last month fell 6.7 percent from 7.1 percent a year earlier as an expansion in the largest Nordic economy continued to generate jobs.

The krona rose 0.2 percent to 8.9408 per euro and 0.1 percent to 6.8443 against the dollar as of 9:50 a.m. in Stockholm.

The Nordic country’s central bank on Dec. 20 cut its benchmark repo rate for the first time since 2009 as growth prospects weakened on slowing demand for Swedish goods. The bank also predicted it would probably leave rates unchanged over the next year.

Borrowing Slows

Household borrowing slowed for a 14th month in November, data released by the statistics office also showed today. Borrowing growth was an annual 5.3 percent last month, compared with 5.5 percent the previous month. That was the smallest gain in at least nine years and down from a 2010 peak of 9.3 percent.

“Stock market declines have sharply eroded household wealth and the housing market has cooled off,” Sarwe said. “Heightened uncertainties overall also reduce consumers willingness to spend. The odds are stacked against households.”

The National Institute of Economic Research last week cut its growth forecast for the Swedish economy next year to 0.6 percent, and predicted unemployment will rise to 7.8 percent next year and to 7.9 percent in 2013 from 7.5 percent this year.

--With assistance by Joel Rinneby in Stockholm, Editors: Jonas Bergman,

To contact the reporter on this story: Meera Bhatia in Oslo at mbhatia2@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman in Oslo at jbergman@bloomberg.net.


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