Sweden’s unemployment rate unexpectedly declined in February, while employment growth was sluggish as the largest Nordic economy struggles with waning export demand.
The non-seasonally adjusted unemployment fell to 7.8 percent in February from 8.0 percent in January, the Stockholm- based statistics office said today. The rate was predicted to be unchanged at 8 percent, according to the median estimate of 13 economists surveyed by Bloomberg.
“Employment was up by 0.7 percent on the month, but is still 0.3 percent below the December reading and 0.2 percent below the average for the fourth quarter,” said Torbjoern Isaksson, chief analyst at Nordea Bank AB, in a note to clients. “The stronger-than-expected February reading does not alter the picture that employment has turned down. Employment is also below the Riksbank’s forecast.”
The Riksbank last month cut its key rate for a second time in as many meetings in an effort to avert a recession. Sweden’s economy, which relies on exports for about half its output, will slow to 0.7 percent this year from 4.5 percent in 2011, the central bank said on Feb. 16.
“The situation on the labor market is deteriorating faster than the Riksbank had expected,” Isaksson said. “We stick to our view of the Riksbank cutting rates again in April.”
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