Norway’s jobless rate rose to the highest level in three years as a recession in Europe weighs on expansion in western Europe’s largest oil producer.
Unemployment rose to 3.7 percent in the March quarter from a revised 3.6 percent in the prior period, Oslo-based Statistics Norway said today.
Unemployment was seen at 3.5 percent, according to the average of seven economists surveyed by Bloomberg.
Norway’s central bank has kept interest rates at a near-record low of 1.5 percent for more than a year to support an economic recovery and protect exporters from currency gains.
In March, policy makers signaled the possibility of a further cut as inflation remained well below its 2.5 percent target.
“The data may indicate that the likelihood of a near-term rate cut from Norges Bank has increased somewhat, but we maintain our view of an unchanged signal rate by Norges Bank going forward,” Ole Andre Kjennerud, an analyst at DNB ASA, said in a note to clients. Weaker demand caused Norway’s exports to fall 5.9 percent in April.
Norsk Hydro ASA, Europe’s third-largest aluminum maker, and other exporters are also struggling with a stronger krone, which has raised the cost of Norwegian sales abroad.
Gross domestic product, excluding oil, gas and shipping, grew 0.7 percent in the first quarter, missing economists’ estimates. Total economic output shrank 0.2 percent, compared with a 0.3 percent growth estimate.
Norges Bank estimates unemployment (NOLBRATE) will average 3.25 percent this year and next. Policy makers next meet on June 20 to set interest rates. The krone rose 0.1 percent to 7.5365 per euro as of 10:35 a.m. in Oslo.
bloomberg.com
Unemployment rose to 3.7 percent in the March quarter from a revised 3.6 percent in the prior period, Oslo-based Statistics Norway said today.
Unemployment was seen at 3.5 percent, according to the average of seven economists surveyed by Bloomberg.
Norway’s central bank has kept interest rates at a near-record low of 1.5 percent for more than a year to support an economic recovery and protect exporters from currency gains.
In March, policy makers signaled the possibility of a further cut as inflation remained well below its 2.5 percent target.
“The data may indicate that the likelihood of a near-term rate cut from Norges Bank has increased somewhat, but we maintain our view of an unchanged signal rate by Norges Bank going forward,” Ole Andre Kjennerud, an analyst at DNB ASA, said in a note to clients. Weaker demand caused Norway’s exports to fall 5.9 percent in April.
Norsk Hydro ASA, Europe’s third-largest aluminum maker, and other exporters are also struggling with a stronger krone, which has raised the cost of Norwegian sales abroad.
Gross domestic product, excluding oil, gas and shipping, grew 0.7 percent in the first quarter, missing economists’ estimates. Total economic output shrank 0.2 percent, compared with a 0.3 percent growth estimate.
Norges Bank estimates unemployment (NOLBRATE) will average 3.25 percent this year and next. Policy makers next meet on June 20 to set interest rates. The krone rose 0.1 percent to 7.5365 per euro as of 10:35 a.m. in Oslo.
bloomberg.com
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