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Sweden Unemployment Rate Rises to 4 Yrs High


Wed 18 Sep 2019 | 10:16 AM
Taarek Refaat

Against analysts' expectations, Sweden's unemployment rate rose last month, hitting 4 years high, amid growing concerns of a slowing economy.

Earlier this week, data released by the Public Employment Agency (Arbetsförmedlingen) revealed that the unemployment rate was 7.4 percent at the end of August, compared with 7.1 percent in the preliminary estimates.

Analysts had expected Sweden's unemployment rate to hit 6.8 percent last month, however, the employment rate recorded 68.3 percent last month, 0.9 percent below July levels.

Last week, economic data revealed that Sweden's inflation rate fell to 1.3 percent in August, down from 1.5 percent a month earlier.

The Swedish krona fell by about 0.6 percent against the euro to its lowest level since last July at 10.6978 SEK.

The reason for the rise of unemployment is that fewer people started new jobs, and others were dismissed from their current ones.

"We assess that the unemployment rate will continue to rise during autumn 2019-20. This is explained partly by a weaker state of the market and partly by the lower number of subsidized positions," Arbetsförmedlingen analyst Anders Ljungberg said.

However, the Swedish government is holding to a surplus economy even as the labor market is giving signs of rapid decline and economic growth has stalled.

For the next 3 years, Finance Minister Magdalena Andersson surpluses on budget, including net initiatives and tax cuts of $2.5 billion (24 billion kronor) next year.