"The recession has been very tough, and the recovery has not really started yet," says Lars Lindvall, acting head of analysis at the Swedish Public Employment Service, to TT.
The July figures from the Swedish Public Employment Service show that 350,000 people were registered as unemployed, corresponding to 6.5 percent of the workforce. This is admittedly a decrease of just over 23,000 people compared with the same month last year. At the same time, the monthly figures from March this year to the latest measurement have fluctuated around 6.6 percent and have dipped to 6.4 percent (in May and June respectively).
We and many other analysts believe that the economy will pick up again in the autumn. It will then take a while before the labor market follows suit, but by the end of 2026 we believe that unemployment will fall again, says Lars Lindvall.
Showed signs of recovery
The Swedish economy has nevertheless shown signs of recovery. For example, GDP growth in the second quarter as a whole increased by 1.4 percent compared with the previous quarter. The Purchasing Managers' Index, a business cycle indicator for the Swedish manufacturing industry, among other things, fell in August, but has still been above the historical average for 13 months in a row.
The big question is therefore why companies are not more aggressive when it comes to hiring?
In addition to a pure lag in the labor market within the business cycle, Lars Lindvall highlights another factor:
People are sitting around waiting for consumption to start up again, households have held back a bit and it could be related to this cost shock we had earlier when people perhaps emptied their savings buffers, or it could be this uncertainty that we live in. You don't know what's going to come next.
Back on the same level
The Swedish Public Employment Service's forecast is that by 2027 the number of unemployed will be back at the same level as before the recession. For example, it was at its lowest in May 2023 (6.1 percent).
A positive factor is that youth unemployment is continuing to decline at a clear pace. In August, 7.4 percent of young people aged 18-24 were registered as unemployed, compared with 8.0 percent the previous year.
I would say that it is historically low, then it may have to do with the size of the youth cohorts and that they vary, says Lars Lindvall.
The Swedish Public Employment Service and Statistics Sweden report unemployment in Sweden every month. However, the statistics differ, often quite significantly, as a result of the authorities measuring in different ways.
The employment service uses those actually registered with the agencies and also has a narrower age range. Total unemployment is measured in the age group 16-66 years. Youth unemployment refers to young people between 18 and 24 years of age.
Statistics Sweden (SCB) uses a sample survey. The age range is 15-74 years for total unemployment and 15-24 years for youth unemployment.
In Statistics Sweden's measurement method (which is based on international criteria), a large proportion of full-time students are also counted as young unemployed. It is often enough for a full-time student to want an extra job, or to wait for a summer job that will start later, to be counted as unemployed.
Source: Swedish Employment Service, Statistics Sweden, TT
