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Fast Comment FinlandDecline in unemployment rate has come to a halt

  1. Unemployment rate (SA) at 6.6 percent in July
  2. Employment fell from the previous year
  3. We expect the unemployment rate will bottom out in 2019-20
Unemployment rate (SA) at 6.6 percent in July
Even if we have expected that the Finnish labour market would stabilise in the near term, the July Labour Force Survey was a bit of a cold shower. It now seems that the rapid decline seen in the unemployment rate since the beginning of 2017 has come to a halt this year. According to Statistics Finland, the unemployment rate (SA) was 6.6 percent in July 2019. The seasonally-adjusted unemployment rate decreased by 0.7 percentage points compared with July 2018, but the trend has remained stagnant since the beginning of the year.
Employment fell from the previous year
In a year-on-year comparison, employment decreased for the first time since October 2016. In July, there were 3,000 fewer persons employed than a year ago. However, unemployment still decreased by 14,000 persons y-o-y. The seasonally-adjusted employment rate was 72.4 percent, which is 0.6 percentage points higher compared with last year. The seasonally-adjusted unemployment rate among young people (aged 15-24) was 16.0 percent, which is 0.9 percentage points lower than last year.
We expect the unemployment rate will bottom out in 2019-20
Stabilisation in the Finnish labour market is now a reality as employment growth has come to an end. As the European manufacturing is in doldrums, particularly in Germany, there will probably be only negative effects from the global markets on Finnish labour market trends. This is not good news for the Finnish government, which has previously stated that public finances will be stabilised by 2023 thanks to continued robust employment growth. The new Finnish government is targeting an employment rate of 75 percent by the end of 2023. We expect that the Finnish GDP growth in 2019-21 will not support achieving this target. Instead, we forecast that the Finnish unemployment rate will bottom out in 2019-20 and slightly increase in 2021.

 



Disclaimer

Janne Ronkanen

Senior Economist

Finland

jaro06@handelsbanken.se

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