A preliminary indicator shows a trend of increasing unemployment in Denmark is likely to have continued.
Around 400 more people became available on the labour market between February and March, according to an initial indicator from Statistics Denmark.
The indicator shows a total of 82,300 people out of employment in March, giving an unemployment rate of 2.8 percent. The figure carries a statistical error margin of 1,000.
The trend is not surprising given the current economic climate, according to an analyst.
“It’s neither surprising nor good news, but what is good news is that unemployment is only growing at a snail’s pace,” Sydbank senior economist Søren Kristensen told news wire Ritzau in a written comment on the figures.
A relatively slow pace on unemployment growth suggests that the impact of inflation and high interest rates on the Danish economy may not be too severe, he said.
High interest rates can be a factor in unemployment because they limit economic growth.
“It’s not least interest the rate increases which are taking the steam out of the economy, and that is actually the point of them, but it’s difficult to give them in the precisely correct doses as experience has shown,” Danske Bank’s chief economist Las Olsen told Ritzau.
The central bank in Denmark, Nationalbanken, raised interest rates in March by 0.5 percent, giving a current rate of 2.6 percent. The hike was the seventh time interest rates have gone up since last summer.
Many people in Denmark started new jobs last year, meanwhile. As many as 819,000 people in Denmark started a new job in 2022, the highest number since the Danish Agency for Labour Market and Recruitment began tracking the measure in 2009.
Many of those people switched jobs more than once, showing a typical high turnover of jobs in Denmark, with a total of 968,000 new job contracts signed over the period. That is also a record high.
“The fact that a record number of Danes experienced having their first day of work at a new job in 2022 is not least connected to the fact that the labour market was powering ahead for most of the year,” said Anne-Louise Lindkvist, head of marketing and customer advisory at Sampension, Denmark’s third largest manager of pension schemes.
Source : TheLocal