Finnish December Joblessness Rose to 6.1% on Recession Outlook

By Kati Pohjanpalo

Jan. 20 (Bloomberg) -- Finland’s unemployment rate rose to a six-month high in December as the prospect of a shrinking economy pushed companies to cut jobs and temporarily lay off people.

Joblessness increased to 6.1 percent from 6 percent in November and 6 percent a year earlier, Helsinki-based Statistics Finland said on its Web site today. The median estimate of five economists in a Bloomberg survey was for unemployment to be unchanged.

Global demand for Finnish goods is waning as Europe, the U.S. and Japan entered a recession simultaneously for the first time since World War II. Metso Oyj, the world’s biggest maker of rock crushers and paper machines, said yesterday it may cut as many as 1,400 jobs in Finland after clients closed paper mills in Europe and North America. Finland’s economy will shrink 1.2 percent this year, the European Commission said yesterday.

“It is our understanding that the new machine market will not return to the level of the recent years,” Metso’s Chief Executive Officer Jorma Eloranta said in a statement before today’s release.

Finnish companies have temporarily suspended more than 20,000 people in the first two weeks of this year, while the number of job cuts doubled last year to 25,000, according to statistics compiled by the Central Organization of Labor Unions SAK. Last year, Finland’s OMX Helsinki 25 Index fell 50 percent as stocks tumbled worldwide.

In December, there were 7,000 more people in work than in the same month a year earlier, the statistics office said. Seasonally adjusted, the unemployment rate was 6.6 percent, up from 6.5 percent the month before.

To contact the reporter on this story: Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net