Danish Joblessness, House Price Losses Worsen as Recession Looms
Danish unemployment climbed to its highest level in 17 months and house prices fell as the Nordic country’s real estate slump shows few signs of abating amid a deteriorating labor market.
Joblessness, including people in vocational training programs, rose in June to a seasonally adjusted 6.3 percent, the highest level since January 2011, Statistics Denmark said today. House prices fell an annual 7.4 percent in May, the Copenhagen- based agency said.
Property values have plunged 25 percent since peaking in 2007, and the government forecasts a 5.5 percent decline in house prices this year, threatening to plunge the economy back into a recession. Economic output, which contracted in the second half of 2011, may have shrunk last quarter, according to Danske Bank A/S, the country’s largest lender.
“Growth in the economy is so low,” Niels Roenholt, senior economist at Jyske Bank A/S, said in a note. “With economic weakness unfortunately continuing to emerge both at home and abroad, you can be worried the consequences at some point will be bigger for the labor market.”
Net joblessness rose in June to 4.6 percent, the statistics agency said. The average house price fell to 1.71 million kroner ($281,852) in May, compared with 1.87 million kroner a year earlier. Prices slipped 1.2 percent from a month earlier, the statistics office said.
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