After a summer packed with good news, Nordea Markets is strengthened in the belief that the Norwegian economy has brighter times ahead – and weakened in the belief of another rate cut in September.
– This summer’s figures have strengthened the impression that the worst period for the Norwegian economy is behind us, writes Nordea Markets chief analyst Erik Bruce in an analysis this week. He explains why to news agency NTB:
– The main thing is that the rise in unemployment has stalled. It is a sign that it partly goes better in the Norwegian economy and promising for future developments.
Bruce is particularly concerned about registered unemployment. Seasonally adjusted figures from NAV recently showed that during July there were 500 fewer unemployed, and 3.2 percent without work.
There is good news in a labor market where the oil brake the last two years has resulted in close to 40,000 jobs disappearing, according to figures from DNB Markets.
Not rate cuts?
On the June meeting of Norges Bank the Governor Øystein Olsen said “there are prospects that the key rate can be lowered during the year.”
But the positive developments, including the labor market, has made Bruce doubt whether the Bank really comes with a new interest rate cut right in September.
– Chances for this are a little less now, he says.
– Better figures and a relatively weak krone are good arguments that they can wait and see how things develop, he adds.
– But we doubt because there were quite clear signals in June about cuts in September, says Bruce.
Source: NTB scanpix / Norway Today