Adjusted for seasonal variations, the unemployment rate was 4.8 percent in January, according to figures released by Statistic Norway (SSB) on Wednesday. The figure corresponds with roughly 134,000 people.
SSB’s labour force survey has shown a steady increase in unemployment since May 2014, when it stood at just 3.2 percent.
The figures show that unemployment rose by 5,000 people from October 2015.
“The change is within the margin of error, but still in line with the trend since May 2014,” SSB wrote.
It was expected that the unemployment level would remain at about the same level as in the previous survey. Along with the new figures, SSB also revised its December unemployment rate from 4.5 to 4.6 percent.
The Norwegian Labour and Welfare Administration (NAV) has its own unemployment figures and they too showed the same trend as the SSB results.
With the increase, unemployment in Norway is now more in line with other countries. 4.3 percent are without a job in Germany, 4.9 percent in the US, 7.0 percent in Sweden and 8.9 percent in the EU.
Erik Bruce, a chief analyst at Nordea Markets, said that although unemployment was higher than expected, SSB’s labour force survey results are not always completely accurate.
“But today's numbers fit well into a picture in which unemployment is gradually rising and employment has stagnated. The previous figures that showed a slight decline in unemployment now appear to be somewhat misleading for the underlying development,” he said in a written statement.
Bruce said that the SSB figures indicate that unemployment is still on a rising trend and that Norges Bank is too optimistic in its estimate of an average unemployment rate of 4.6 percent this year.
“This substantiates the impression that we have a weakening of the labour market with rising unemployment and stagnating employment,” senior economist Kyrre Aamdal from DNB Markets told E24.
Bruce added that if there are more confirmations of the labour market’s deterioration, there will likely be another rate cut from Norges Bank.
Double oil downturn
The rising unemployment rate is largely due to a double oil downturn in Norway – the combination of declining investments in the Norwegian continental shelf and a drop in oil prices of about 65 percent since the summer of 2014.
The problems in the oil industry mean that it job losses are most pronounced in the western part of the country. There are large regional differences, and in a number of counties, the unemployment rate remains significantly below that of Western Norway.
The government has in this year's budget posted a stimulus package of four billion kroner in the fight against unemployment.
The opposition believes, however, this is not enough, and the Labour Party proposed in its alternative budget a package of measures totaling seven billion kroner. Labour on Wednesday accused the government of focusing too much on tax cuts that it says will solve the challenges for the Norwegian economy.
‘We need a policy that helps, not a government that believes that tax cuts are the answer to all challenges for the Norwegian economy,” Labour’s finance spokeswoman Marianne Marthinsen said.