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Fast Comment NorwayRegistered unemployment continues to drift sideways in September

  1. Small increase in the number of people registered as fully unemployed in September
  2. Unemployment slightly higher than expected by Norges Bank
  3. Amount of available resources has been greater than observed by the unemployment rate alone
A slight increase in registered unemployment in September
According to NAV, the number of people registered as fully unemployed increased by 200 people in September. After a spike in unemployment in July which was mostly due to technical reasons, developments in the last two months have been somewhat weaker than we expected. The unadjusted unemployment rate was 2.3 percent in September, which translates to a seasonally-adjusted rate of 2.37 percent. Norges Bank, we and consensus had forecast 2.35 percent. The deviation is small and can hardly be characterised as significant in isolation. However, adding the negative surprise from LFS-unemployment earlier this week, our conclusion is that developments in the unemployment rate so far has been slightly on the weak side of Norges Banks’s estimates. The downtrend in the unemployment rate has stalled this year. We do not believe that weak employment growth is the key explanatory factor. Instead, we point to a further increase in the labour participation rate, as it continues to recover from its preceding cyclical drop. With participation on a rise, the labour force is currently growing faster; hence, the downturn in unemployment has weakened. The fact that people are encouraged to join the labour force is not an indication of a weak labour market, but rather the opposite. However, this trend also highlights that the amount of available resources has been greater than observed by the unemployment rate alone.


Disclaimer

Halfdan Grangård

Senior Economist

Norway

hagr11@handelsbanken.no

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