STOCKHOLM: Unemployment in Sweden in February dropped to its lowest level since the 2008 financial crisis, giving a boost to the central bank's hopes that rising wages will help push up sluggish inflation.
Driven by a stronger employment, seasonally adjusted unemployment was 5.9 percent in February, Statistics Sweden said on Thursday, down from 6.5 percent in the previous month.
Analysts in a Reuters poll had expected an unchanged figure.
"This is the first piece of good news for the Riksbank in a long time," said Nordea analyst Torbjorn Isaksson. "This of course increases the Riksbank's hopes that wage increases will take off."
The Swedish crown strengthened to 10.09 crowns versus the euro
after the data was published.
Inflation data for February published on Wednesday showed CPIF inflation missed the central bank's forecast for the third month in a row at 1.7 percent annually, below the Riksbank's 2-percent target.
Housing investments and private consumption have level led off and services prices have disappointed.
Economic growth has been strong, but wages - a key inflation driver - have failed to pick up and many analysts expect the Riksbank to be very cautious before beginning to tighten policy.
A Kantar Sifo Prospera survey on Thursday showed employer organizations expect 2.5 percent annual wage growth two years ahead while employee organizations see wage growth at 2.8 percent over the same time horizon.
While jobless figures were a positive surprise, analysts and the Statistics Office cautioned that the numbers might be more uncertain than usual, partly due to holidays affecting data collection.
"We shouldn't draw too many conclusions from the Riksbank's point of view given that we believe the data can contain measurement errors," Swedbank analyst Cathrine Danin said.
Unadjusted, unemployment fell to 6.3 percent, below the 7.0 percent forecast in a Reuters poll of analysts.
Total employment stood at 5.039 million people, up from 4.969 million people the previous month.
Comments
Comments are closed for this article.