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Fast Comment NorwayRegistered unemployment plagued by technical changes, but trend relatively flat this year

  1. Artificial increse in registered unemployment in November
  2. Driven by changes to the registration process
  3. The latest data points are not directly comparable to NBs estimates
Artificial increse in registered unemployment in November
The number of people registered as fully unemployed increased by 840 people in November (seasonally adjusted). The unadjusted unemployment rate was recorded at 2.3 percent, up from 2.2 percent in October. When taking seasonal variations into account, this gives an unemployment rate of 2.4 percent in November, following 2.3 percent in October. At face value the outcome was weaker than anticipated: Both we and consensus expected 2.2/2.3 percent in November, unadjusted/seasonally adjusted, which was also Norges Bank’s forecast. However, the press statement yet again refers to technical changes in the registration process. This time NAV has introduced a new procedure that shortens the time-lag from the registration point and to actual inclusion in the statistics. According to NAV, this change of procedure has lifted the number of people registered as fully unemployed in November. Adjusted for this structural break in the time series, however, seasonally adjusted unemployment actually fell by 900 people in November. This was the second round of technical changes that we have seen since this summer. The previous change, introduced in July, included text message reminders to the unemployed (to be still counted as unemployed). This has lifted the level of registered unemployment in every month since June. To get a grip of the underlying trend, given these structural breaks, we have to smooth through the data. Given the ‘artifical’ jump in unemployment in November (+800 people), owing to the registration procedure, we would expect a decline again in December; given still robust employment growth. The broader picture remains the same, namely that registered unemployment has levelled out this year. Something which also NAV is referring to in the latest press statement: “as a share of the labour force, people registered as fully unemployed has been relatively stable at 2.3-2.4 percent in 2018, and that is also the case following the structural break in November.” All told, both registered and survey unemployment have moved sideways this year. As stated before, employment growth has held up well this year. But the labour force has risen substantially as well, driven by the cyclical recovery of the participation rate. Due to the structural breaks in the data we struggle to compare the latest NAV-figures with Norges Bank.


Disclaimer

Marius Gonsholt Hov

Senior Economist

Norway

maho60@handelsbanken.no

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