Rise in Danish unemployment 'sign companies letting staff go'
The number of people out of work on the Danish labour market continues to creep upwards, and data suggests it can no longer be written off to the arrival of job-ready Ukrainian refugees.
According to data from Statistics Denmark, about 2,800 more people were unemployed in July than in June.
Recent increases in unemployment numbers have been attributed to the arrival in Denmark of refugees from Ukraine who are declared fit to work shortly after being granted residence.
But the number of unemployed Ukrainians increased by only 200 in July.
The latest figures are instead a sign that “companies have quietly started to get out the redundancy notices,” Sydbank chief economist Søren Kristensen told news wire Ritzau.
Despite what appears a concerning trend, overall unemployment remains low. The unemployment rate of 2.7 percent, or about 77,800 people out of work, is among the lowest ever recorded in Denmark.
The number of people considered long-term unemployed – not in employment for 80 percent of the previous year – is currently the lowest it has been since records of the metric began in 2007.
An increase in the number of unemployed could indicate a healthy cooling of the red-hot Danish employment market, in which companies have struggled to fill open roles, Kristensen said.
“We have to recognise that the risk of overheating in the economy is quite real. The combination of such low unemployment and such high inflation is a breeding ground for unsustainably high wage increases,” the economist told Ritzau in a written comment.
“We can’t say this is what we’re seeing at the moment,” he added, noting that the “risk has fortunately decreased after today’s numbers”.
Economists expect further increases to unemployment numbers in the near future.
“We still expect to be looking at a period in the autumn and winter where unemployment increases further. Not necessarily dramatically, but an increase nevertheless, which will show that the situation on the labour market and in the economy is changing significantly,” he said.
READ ALSO: Danish businesses repeat call for foreign workers amid labour shortage
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According to data from Statistics Denmark, about 2,800 more people were unemployed in July than in June.
Recent increases in unemployment numbers have been attributed to the arrival in Denmark of refugees from Ukraine who are declared fit to work shortly after being granted residence.
But the number of unemployed Ukrainians increased by only 200 in July.
The latest figures are instead a sign that “companies have quietly started to get out the redundancy notices,” Sydbank chief economist Søren Kristensen told news wire Ritzau.
Despite what appears a concerning trend, overall unemployment remains low. The unemployment rate of 2.7 percent, or about 77,800 people out of work, is among the lowest ever recorded in Denmark.
The number of people considered long-term unemployed – not in employment for 80 percent of the previous year – is currently the lowest it has been since records of the metric began in 2007.
An increase in the number of unemployed could indicate a healthy cooling of the red-hot Danish employment market, in which companies have struggled to fill open roles, Kristensen said.
“We have to recognise that the risk of overheating in the economy is quite real. The combination of such low unemployment and such high inflation is a breeding ground for unsustainably high wage increases,” the economist told Ritzau in a written comment.
“We can’t say this is what we’re seeing at the moment,” he added, noting that the “risk has fortunately decreased after today’s numbers”.
Economists expect further increases to unemployment numbers in the near future.
“We still expect to be looking at a period in the autumn and winter where unemployment increases further. Not necessarily dramatically, but an increase nevertheless, which will show that the situation on the labour market and in the economy is changing significantly,” he said.
READ ALSO: Danish businesses repeat call for foreign workers amid labour shortage
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