OSLO: Norwegian unemployment fell to near five-year lows in January as economic growth accelerated and the country recovered from a slump in oil prices, Norway's NAV labour agency said.
The numbers were much stronger than the central bank had expected and could lead to an earlier hike of the key policy rate, which the board of the bank has pencilled in for December 2018, economists said.
Seasonally adjusted unemployment fell to 83,930 people, the lowest seen since April of 2013. Analysts in a Reuters poll on average had predicted 86,200 would be unemployed.
"The trend of falling unemployment is prevalent in all regions and for most professions," NAV chief Sigrun Vaageng said in a statement.
Nordea Markets said the numbers showed a "massive drop", adding that the economy is tightening faster than Norges Bank expects.
"With growth picking up from last year, we see no reason why unemployment should stop falling anytime soon," Nordea said in a note to clients.
"With the crown currency around current levels and less risks to the housing market, we could see the first rate hike even earlier than December, which is our main scenario," Danske Bank Chief Economist Frank Jullum said.
The government, which won reelection last year, said the figures showed it was having success.
"The tide has turned and the government's policies are working, which is satisfying," Minister of Labour and Social affairs Anniken Hauglie said in a statement.
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