Erik Johannes Bruce, Research Analyst at Nordea Markets, suggests that Norway’s registered unemployment should continue decreasing in line with Norges Bank’s view.
Key Quotes
“Norges Bank revised the rate path slightly down in September while we and other analysts had expected a higher path. Norges Bank gave several reasons for the downward revision, but news arguing for lower growth in domestic demand and wages were the main reasons.”
“Norges Bank pointed to revised national accounts figures showing lower business profitability (operating surplus) which would dampen wage growth looking ahead. The main reason for the downward revision of profitability in the national accounts is higher figures for capital deprecation.”
“In September, registered unemployment again moved about sideways and ended somewhat on the upside to Norges Bank’s forecast from the September report. We hold on to the view that growth and hence demand for labour should be strong enough to push registered unemployment somewhat lower and look for a drop by between 500 and 1,000 persons s.a. If we are right, the s.a. unemployment rate should be close to Norges Bank’s forecast. However, another month with sideways or higher unemployment argues, all else equal, for a downward revision of the path in December.”
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