Research
Tip: To personalise the research list, click the gear symbol above.


Choose type:


Fast Comment SwedenJuly sentiment survey and June unemployment report: Continued deterioration in sentiment and unemployment rate rises to 6.6 percent

  1. Weaker sentiment than normal in the economy
  2. Higher than expected unemployment and a decrease in the employment rate
  3. The economic slowdown will eventually force the Riksbank to cancel planned rate rises
Weaker sentiment than normal in the economy
The July batch of sentiment indicators from the National Institute of Economic Research overall signal a further slowdown of the Swedish economy. The Economic Tendency Indicator (ETI) was 96.8, slightly below consensus expectations (97.5) but in line with our own expectations (96.5). The decrease was due to weaker signals from manufacturing and services, whereas consumer confidence improved for a second month.
Higher than expected unemployment and a decrease in the employment rate
The Swedish labour market is still strong, with a high employment-to-population ratio and low unemployment. However, there are signs that it is cooling off. Companies' employment plans have slowed down and seasonally adjusted data indicates a decrease in the employment rate and an increase of the unemployment rate. After today's higher than expected unemployment print (6.6 vs. our estimate of 6.2), it is clear that our positive unemployment forecast for 2019 is under threat.
The economic slowdown will eventually force the Riksbank to cancel planned rate rises
Overall, the increasingly clear signs of a slowdown make it difficult for the Riksbank to stick to its planned rate rises. The last nail in the coffin for the Riksbank’s rate rise case will likely be rate cuts by the Fed and the ECB. Ultimately, however, we do not expect the Riksbank to cut further into negative territory, other than in the case of a severe economic crisis.



 


Disclaimer
Anders Bergvall

Anders Bergvall

Senior Economist

Thematic analysis and USA

anbe83@handelsbanken.se

Latest analyses

2019-08-30

Aktuell ekonomi

2019-07-25

Fast Comment Sweden

2019-07-01

Aktuell ekonomi