Swedish unemployment continued to fall in September, coming in line with consensus expectations. The labor market had bottomed out in June, which might compel the central bank to revise their view on the rebound.
The jobless rate came in at 9 percent in the month, falling from August’s 9.1 percent. The labor supply dropped 0.6 percent on the month due to many young people going back to school. Employment fell 0.6 percent on the month after two months of straight gains, and was down 2.6 percent year-on-year. In the third quarter, employment came in flat, noticeably better than forecast. The employment rate stood at 66.7 percent, which is higher than the central bank’s forecast for the coming year. Hours worked dropped 4.7 percent year-on-year, which was lower than August’s reading.
Other data also imply that unemployment has peaked and that the situation on the labor market is rebounding. The number of newly registered unemployed are back to normal levels, as well as the number of layoffs. The increased spread of the virus is a concern, but in the near term all indicators point to a continued rebound.
“Today’s report shows a labour market stronger than the Riksbank has in their forecast. The difference may seem small today, but their whole recovery path will likely be revised soon. On one hand, the stronger labour market supports the ongoing pay talk. On the other hand, a rate cut becomes more likely, paradoxically enough, when the economy is improving with little inflation to be seen”, said Nordea Bank in a research report.