Norwegian Retail Sales Growth Slows Amid Rising Unemployment

Norwegian retail sales growth slowed in February as rising unemployment weighs on consumer spending in Europe’s second-richest nation per capita.

Retail sales, excluding motor vehicles and petrol stations, gained 0.5 percent in the month, after rising 1.2 percent in January, the Oslo-based statistics office said today. They fell 0.6 percent in the year. Sales were estimated to rise 0.2 percent in the month, according to a Bloomberg survey.

“Following the decline in retail sales last fall, consumption rebounded in 2013,” Kyrre Aamdal, a senior economist at DNB ASA, said in a note to clients. “The underlying trend is still moderate.”

A recession in debt-stricken Europe, Norway’s biggest trading partner, has started to hurt the second-biggest Nordic economy. Weaker growth prospects are feeding through to the labor market, pushing unemployment to 3.6 percent in the January quarter -- the highest level in more than two years, according to Statistics Norway.

The krone weakened 0.3 percent against the dollar to trade at 5.8291 by 10:40a.m. in Oslo. It gained 0.2 percent against the euro at 7.4535.

Policy makers held Norges Bank’s their benchmark deposit rate unchanged at 1.5 percent last month and signaled a possible rate cut to limit krone gains and boost growth.

Growth in the mainland economy, which excludes oil, gas and shipping, is estimated to slow to 2.75 percent in 2013 from 3.5 percent last year, according to central bank forecasts.

Norges Bank will publish its next rate decision in May.

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