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Fast Comment FinlandFirst signs that the Finnish labour market is heading towards stabilisation

  1. Unemployment rate (SA) 6.6 percent in April
  2. Employment growth moderated to 1.2 percent y-o-y
  3. More stable progress expected in the Finnish labour market
Unemployment rate (SA) 6.6 percent in April
April’s labour market survey provided an upward revision to the seasonally-adjusted unemployment rate trend. According to Statistics Finland's ILO/EU-compatible Labour Force Survey, the unemployment rate (SA) was 6.6 percent in April 2019. In March report, the unemployment rate was reported at 6.4 percent. With April data included to the time series, the March reading was now revised up to 6.6 percent. In April, the unemployment rate decreased by 1.0 percentage points compared to the previous year.
Employment growth moderated to 1.2 percent y-o-y
Employment increased by 28,000 people from a year ago level and the number of unemployed decreased by 14,000 people y-o-y in April. Employment growth stood at 1.2 percent y-o-y, which is the lowest growth rate since September 2017. The seasonally-adjusted employment rate was 72.4 percent, which is 1.1 percentage points higher y-o-y. The seasonally-adjusted unemployment rate among young people (aged 15-24) decreased by 1.2 percentage points, compared to last year, to 16.1 percent.
More stable progress expected in the Finnish labour market
The Finnish labour market have performed well since the summer 2017. However, it seems now that the strongest phase of improvement is behind us. One indication of that is the upward revision to seasonally-adjusted unemployment rate trend in the April’s labour market report. Of course, when making conclusions, we must bear in mind that new revisions are always possible when the new data is included to the time series. However, as the employment growth is clearly moderating and the Finnish companies employment expectations outside the services sector are weakening, the unemployment rate seems to be heading towards stabilisation in the near future. We have expected that the Finnish labour market enters a more stable period and forecasted a 6.5 percent average unemployment rate for 2019 and 2020 in our latest Global Macro Forecast published in April. In accordance with that, the monthly readings in seasonally-adjusted unemployment rate will probably bottom out in a year. At the moment, there are also government negotiations underway in Finland, and the signs of a more stable labour market development are not good news to the parties participating to the government coalition talks. It is widely considered that reaching a 75 percent employment rate in the coming years is crucial in order to keep the Finnish public finance on a sustainable path.



Janne Ronkanen

Senior Economist


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