Labour Market Update: Hiring gears up

Sweden’s labour market is improving robustly, but elevated unemployment and incomplete recovery in hours worked show that slack remains and employment growth should slow as normalisation continues.

• BAS data show employment up 0.1% in July, the employment rate for ages 15–74 at 69.5%, and unemployment slightly lower at 5.2%; PES registrations continued to decline in August and September data pointed in the same direction.
• The LFS recorded employment growth of 0.8% in both July and August, with employment 1.9% above August a year earlier and the employment rate matching its 2023 record at 70.1%.
• Unemployment nevertheless rose slightly to 8.9% in August because the labour force expanded by 1.1%; the participation rate reached a record 76.8%, while strong youth employment in July and August may correct in September.
• Employment plans increased for a third consecutive month in September and reached their highest level since 2022, led by volatile construction but positive across all sectors.
• PES vacancies have risen from their May low but remain weak, while Statistics Sweden’s vacancies increased in the second quarter and remain below the 2022 peak but above pre-pandemic levels; the divergence may reflect employers using PES less for recruitment.

Takeaway: The data support further employment gains, but growth should decelerate over the coming year as the labour market normalises and demographic trends limit labour-supply expansion; BAS and LFS unemployment figures are not directly comparable because BAS is register-based whereas LFS uses a broader jobseeker definition.