Unemployment Rate Converges Toward Riksbank Forecast

Swedish seasonally adjusted unemployment for December rose to 8.2%, above November's 7.9% and consensus estimates of 8.1%.

• Unemployment is thus seen converging to the Riksbank's November MPR forecast, which saw the Q1 '24 rate at 8.3%. The labour market is therefore evolving broadly in line with the Riksbank's expectations, and does not suggest any curveballs at next week's decision, where rates are firmly expected to be held steady (although changes to the QT pace are likely).
• The employment rate (also SA) was steady at 69.2%, while the participation rate rose a touch to 75.4%.
• The drift upwards in the unemployment rate has also been seen in the unemployment claims data from the Public Employment Service. December's reading (released last week) showed a claims rate of 6.64%, the 5th consecutive rise.
• The claims data also showed the vacancies-to-unemployment ratio at 0.42 in December, a touch up from 0.40 in November but down from the cycle high of 0.56 in May '23. However, while the labour market continues to loosen, it is still tight by historical standards.
• Rounding off the rest of this morning's Swedish data, the growth rate of lending to households in December was 0.4% Y/Y (vs 0.5% prior), while the November trade balance tightened to SEK3.8bln (vs revised SEK12.1bln prior). For 2023 overall, net trade saw a SEK50.8bln surplus.