Sweden’s unemployment data is expected to be released today. According to the economists polled, the unemployment rate is expected to remain steady at 6%, unchanged from the month ago. The unemployment rate fell from 6.6% that was registered in July this year.
Sweden Unemployment Rate: 6%, August 2017 (Source: Tradingeconomics.com)
Sweden’s unemployment rate spiked to 7.4%, once in February and later in June this year before falling to the current 6% unemployment rate in August.
However, the lower unemployment rate is unlikely to see any major changes from the Riksbank with inflation staying muted after a brief rise earlier this year.
Sweden Inflation below estimates in September
Last week, inflation data showed that consumer prices rose 2.1% on a year over year basis in September. This was below the consensus estimates of 2.4% and was down from August inflation data of 2.2%.
The inflation report showed that the CPIF-inflation was at 2.3% on a year over year basis in September and was lower than the Swedish Riksbank’s forecast of 2.4%. Core CPIF which excludes energy prices was lower as well at 1.9% on a year over year basis and missed the central bank’s forecasts as a result. However, the 1.9% core CPIF comes after prices were above 2% for the months of July and August.
The weaker than expected inflation data saw the markets adjust the rate hike expectations from the Riksbank. The central bank, according to market estimates is now expected to hike rates around the second half of next year.
Riksbank to wait for ECB’s policy response
The Riksbank is expected to meet later this month where it is expected to remain on the sidelines as a result of the latest inflation data. Markets will be looking forward guidance from the Riksbank, and it will be left to be seen if the central bank will offer any clues on future rate hikes.
When the central bank met last month, there were no major changes made to monetary policy from the Riksbank. The central bank signaled that the economic signals were good but cited that global inflation continued to remain muted. The central bank said that stronger GDP growth that was witnessed in the second quarter and the unemployment rate staying low were positive signs.
