Norway’s unemployment rate unexpectedly fell in April from a three-year high as western Europe’s biggest oil producer resists the drag from the recession-ridden euro area.
Unemployment, adjusted for seasonal variations, fell to 3.5 percent in April from 3.7 percent in March, Oslo-based Statistics Norway said on its website today, citing the labor force survey. Unemployment was seen at 3.7 percent, according to the median estimate of eight economists surveyed by Bloomberg.
“The importance of this figure is that last month’s 3.7 percent now seems like an outlier,” Erik Bruce, senior economist at Nordea Bank AB, said in an e-mailed note to clients. “After a rise last autumn, unemployment seems to have stabilized at 3.5 percent.”
Norway’s central bank has kept interest rates at a near-record low of 1.5 percent for more than a year to support the oil producer’s economic recovery and protect exporters from currency gains. The krone tumbled 3.3 percent against the euro on June 20 after the central bank signaled an increased chance of a rate cut in September as inflation remained below its 2.5 percent target.
The krone strengthened as much as 0.2 percent to 7.9541 per euro and was little changed at 7.9659 as of 10:44 a.m. in Oslo.
“The level of employment is lower than in October last year, so job growth has slowed recently,” Kjersti Haugland, an analyst at DNB ASA, said in an e-mailed note to clients. “We do, however, anticipate that indicators will continue to show signs of weakening and that the policy rate will be cut in September.”
Norway’s $730 billion sovereign wealth fund, the world’s biggest, has shielded the nation from the fallout from the single currency bloc’s recession. While survey unemployment rose in the first three months of the year, it remained below the record 12.2 percent rate in the 17-nation euro area.
Norges Bank estimates unemployment will average 3.75 percent this year and the next.