Norway’s 128% Unemployment Jump Shows Devastating Power of Virus
Norway’s 128% Unemployment Jump Shows Devastating Power of Virus
(Bloomberg) --
The number of Norwegians seeking unemployment benefits jumped by a staggering 128% in just a week as the spread of the coronavirus brings the richest Nordic economy to a near standstill.
Norwegian companies have already announced thousands of temporary lay-offs. It’s now clear those measures are quickly feeding through to economic data, providing a glimpse of what the rest of Europe may be facing, and putting pressure on the central bank to deliver more emergency interest rate cuts.
Norway’s reliance on oil exports has left it fighting an economic crisis on two fronts, and its 5.3% registered unemployment rate is already the highest since 1995, compared to monthly data, according to official figures published on Tuesday.
To keep up with the crisis, jobless data will now be published every week, and the Norwegian Labour and Welfare Administration expects the rate to keep rising, it said. Norway’s 1993 unemployment record of 6.3% may be crushed after lay-off benefits applications this week almost reached the total number in 2009, when the financial crisis was wreaking havoc.
“This data should be very worrisome for Norges Bank,” which as recently as last week only factored in a slight increase in unemployment through June, SEB Chief Strategist Erica Blomgren Dalsto said. “A further rate cut by at least 50bps is likely in the near-term.”
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