Denmark’s Workforce Hits 3 Million Milestone Amid Record Hiring


Denmark’s workforce jumped to a record 3 million people, suggesting the Nordic country’s strong labor market will help the economy weather the global crisis.

The number of people in paid jobs rose by 4,300 in August from the month before, Statistics Denmark said on Friday. Both private and public employment increased over the period, according to the seasonally-adjusted figures.

Record Workforce in Denmark

Number of employed people reaches 3 million

Source: Statistics Denmark

Denmark, a country of 5.9 million people, has avoided the sharp economic decline seen elsewhere in Europe, mainly due to its high employment. Friday’s figure marks a “historic milestone” and is remarkable because challenges from inflation, lower purchasing power and economic uncertainty “have been building up over a long period of time,” according to Lisette Rosenbeck Christensen, a senior economist at Arbejdernes Landsbank.

“Overall, the economy and thereby the labor market is doing reasonably well,” the economist said in an note. “At the same time, a significant labor shortage has long supported employment in many industries.”

Employment is likely to fall toward 2025, the central bank said in a prognosis released last month, but still expects it to remain high and continue to exceed levels before 2022.

Sweden’s unemployment rose in September, showing that a steady increase in borrowing costs is starting to hit the labor market in the largest Nordic country.

The seasonally adjusted unemployment rate was 8.1% in September, which was higher than the 7.7% that economists surveyed by Bloomberg had expected, and follows a significant rise in the previous month, according to figures released by Statistics Sweden on Friday.

The data could indicate that a long-expected labor market reaction to pressure from higher interest rates and rising consumer prices is finally materializing. Until now, unemployment rates have been unexpectedly immobile, a development mirrored in many other economies through the current bout of inflation and monetary policy tightening.

The resilience of the labor market has also surprised Sweden’s central bank, which has taken its benchmark interest rate to 4% from zero since April last year. While rising unemployment could serve to dampen demand and help the Riksbank rein in price increases, most forecasters still believe a final rate hike, to 4.25%, is likely in November.

“Demand for labor has declined markedly and the number of layoffs has increased,” Nordea’s head of macro research, Susanne Spector, said in a note to clients. “The Riksbank’s focus is on the still too high inflation, but on the margin, the fact that the situation on labor market has started to deteriorate could increase the Riksbank’s worries over the Swedish economy.”

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