Sweden Unemployment Jumps as Analysts Warn of Krona Overreaction
Sweden Unemployment Jumps as Analysts Warn of Krona Overreaction
(Bloomberg) --
Swedish unemployment jumped in January, pushing the krona down to a fresh day low versus the euro.
The seasonally adjusted rate rose to 7.1%, up from the previous month’s reading of 6.6% and above analysts’ consensus forecast of 6.9%, according to Statistics Sweden. The trend rate was unchanged at 7%, while the unadjusted rate surged to 7.5%, the highest in almost a year.
Economists cautioned against reading too much into the estimates, however.
Stefan Mellin at Danske Bank said the data should be taken “with a grain of salt,” while Olle Holmgren and Marcus Widen at SEB said the overall picture of the labor market “suggests there is little drama in the numbers.” Manuel Oliveri at Credit Agricole noted that the time series has been the subject of “several changes in recent months and weakness has been widely expected.”
Oliveri said he was placing a “bigger focus” on Wednesday’s inflation data.
Robin Ahlen at Swedbank pointed to the “choppy” nature of Sweden’s labor market data, “thus one should be cautious about over-interpreting individual numbers and rather look at the trend development and a wider palette of data.”
That said, Sweden’s economy has been slowing and Swedbank continues to “expect the unemployment rate to increase,” with employment set to “grow at a decent pace going forward.”
The krona fell as much as 0.6% against the euro and was trading at 10.5551 per euro at 11:06 a.m. in Stockholm.
Story Link: Sweden Jan. Unemployment Rate Rises to 7.5%
--With assistance from Rafaela Lindeberg and Niclas Rolander.
To contact the reporter on this story: Nick Rigillo in Copenhagen at nrigillo@bloomberg.net
To contact the editors responsible for this story: Christian Wienberg at cwienberg@bloomberg.net, Tasneem Hanfi Brögger
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