Sweden's rising confidence, falling unemployment spur sales

Stockholm: Swedish retail sales rose for a sixth month in February as consumer confidence rose to its highest level in more than two years and unemployment fell.

Sales increased an annual 2.3 per cent after rising 3.3 per cent the previous month, Stockholm-based Statistics Sweden said Monday.

The median estimate of nine economists surveyed by Bloomberg was for a rise of 4.2 per cent. In the month, sales fell a seasonally adjusted 1 per cent after increasing a revised 0.7 per cent the previous month.

Swedish consumer and manufacturing confidence rose for a second consecutive month in February after the government said the economic outlook improved.

A fourth tax cut since 2006 and record-low borrowing costs have also helped boost demand.

Hiring resumes

Unemployment surprisingly fell to 9.3 per cent in February as companies resumed hiring because of improving export demand. Scania AB, the Swedish truckmaker controlled by Volkswagen AG, will resume a five-day working week for most of its Swedish production units as it boosts output because of rising demand in emerging markets, the company said on March 16.

The jobless rate will peak at 9.5 per cent this year instead of at 10.7 per cent as predicted earlier, the government predicted on January 27, as the economy grows 3 per cent.

Almost nine in 10 households predict their personal finances will improve or stay the same in the next 12 months, pollster Skop said on March 19.

Sweden's central bank has kept its key lending rate unchanged since cutting it to a record-low 0.25 per cent in July.

The government cut income taxes on January 1 for a fourth time since coming to power in 2006 as part of a stimulus package worth about 1 per cent of gross domestic product to boost demand ahead of elections in September.