Wickman-Parak: The economy and the labour market
Deputy Governor Barbro Wickman-Parak held a speech on Thursday at SEB where she discussed developments in the labour market and their importance for Swedish monetary policy:
“Normally, changes in employment and unemployment occur two quarters after changes in production. This time, however, it appears as though the upturn in employment has already begun and unemployment has stopped rising, which is surprisingly early given the large fall in GDP. But unemployment is still high, and we are expecting a slow recovery in employment in the coming period.
How has the stronger labour market affected the interest rate decisions? Firstly, it should be said that it is not possible to point to any individual variable that will alone be a determining factor in an interest rate decision. A weaker GDP outcome for the fourth quarter could on its own have been a negative signal and made us more doubtful about the timing of the coming interest rate increase. But we also had surprisingly positive information on the labour market, which provided support for the assumption that the economy is moving in the right direction.”
Read the whole speech in the PDF file below.
