Norway: Unemployment slightly up – Nordea

Kjetil Olsen, analyst at Nordea Markets, notes that Norway’s registered unemployment increased slightly in July as registered unemployment increased seasonal adjusted by 600 persons in July, above their expectations of a drop of 500 persons.

Key Quotes

“The downward trend in unemployment seems thereby to be stalling, see graph, but we would like to see the August number to call off the downward trend. The summer months can often suprise and therefore it is wise to take the numbers with calm.”

“Growth is still more than strong enough to bring unemployment lower, but given the rather low level we believe it is increasingly harder to find qualified labour among the unemployed. Labour shortage is therefore an increasing problem and the very reason why wage growth is rising. This is the most important reason why Norges Bank hike rates.”

“Today’s figure was slightly on the weak side to Norges Bank also, but probably not enough to have major impact on its view. The NOK has weakend further and is now close to 3 % weaker than Norges Bank expected. Oil prices is still above USD 60/br. We still think Norges Bank will signal a hike in September at the August meeting.”