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Forecasting COVID-19’s Impact on Q1 Unemployment

We’ve recently expanded the Macrobond database to include daily and weekly statistics from the Norwegian Labour and Welfare Administration, related to the impact of COVID-19 on the Labor Market.

Norway, like many other countries, publishes their key unemployment rate on a quarterly basis, with the Q1 figure to be released on the 23rd of April.

With our newly-added daily and weekly statistics for Norway, we built a very simplistic model to forecast the impact of COVID-19 on the Q1 unemployment rate.

We already carry daily and weekly unemployment data for a number of other countries, so we can compare how COVID-19 is expected to impact the Scandinavian countries, for example, as in the chart below. Our model suggests that the unemployment rate in Norway could reach as high as 16,4%, a level not even close to any previous all-time high. And yes, this is another chart with a drastic ’90 degree’ vertical jump, like we’ve seen on several variables in the past weeks across the world.  

As for the model, it is built as follows. (As stated above, the model is simplistic, so you are welcome to use the data and analytics in Macrobond to build your own more complex models! If you don’t already have Macrobond, here’s your chance to try it.)

-Labor Force: we are assuming a stable labor force, extending the Q4 2019 value to now

-Unemployed persons: we are again assuming no change until the impact of COVID-19, hence using the Q4 2019 stock and adding the aggregated increase of daily applications since the 9th of March.

-Below is the daily series of applications to unemployment benefits, since 9th March. The total reported number is also broken-down as ‘layoffs’ and ‘ordinary’ applications.

-The total series is the one we used in the model, as cumulated daily applications.

Below is a summary table of the unemployment by occupation. The data reflects the last weekly update – while the blue marker is the value from end of February. The table can be read as follows: as of now, travel and transport has an unemployment rate of 25%, with more than 45,000 persons unemployed, compared to 6,500 at the end of February.

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Data Additions by Country & Region 



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