Sweden, long regarded as a bastion of economic stability and high employment, now faces tough times. An economic recession and an upward trend in unemployment threaten the progress made in recent years, particularly in those sectors that have been the backbone of the labor market.

According to the latest analyses from Arbetsförmedlingen, the Swedish Public Employment Service, the situation is particularly severe in the private service sector, which has long served as a crucial integration engine and offered the first job opportunities to many newcomers to the country. Emil Persson, a labor market analyst, warns that it is here that the greatest decline in job offerings may occur.

From 2014 to 2021, the employment rate among men in especially vulnerable areas increased from 57 to 66 percent, and among women from 47 to 56 percent. The most common jobs have been within transport and warehousing, restaurants, cleaning and services for men, and cleaning and services, healthcare and childcare for women. This positive trend is now at risk of being reversed due to economic downturns.

Nationally, the increase in unemployment may not seem so dramatic: from 6.4 percent (333,000 people) this year to 6.6 percent (354,000 people) next year. But in metropolitan regions, the situation worsens, and the jobs most at risk are precisely within the private service sector.

The high housing prices in the three metropolitan areas mean that the increased mortgage rates have the greatest consequences there.

  • Additionally, essential goods like food have become more expensive. So, people cut back on non-essential consumption.
  • Trade, transport, hotels, and restaurants - these sectors are all affected by the reduced consumption in society. There is also a relatively high proportion of foreign-born individuals and people with shorter education, i.e., the same individuals who live in these areas, says Emil Persson.

How job development within the public sector, where relatively many women from vulnerable areas work, will turn out is more uncertain. Municipalities and regions are also under pressure, which Persson sees as a cause for concern.

For those who are entirely new to Sweden, it will be considerably more challenging to gain a foothold in the Swedish labor market in the coming years.

  • We are in a recession and have had a shrinking GDP for two consecutive quarters. It's a tougher situation on the labor market for everyone, says Emil Persson.

His best advice for those who lose their jobs is to broaden their search area - both in terms of industry and geographically. Additionally, further education is always a good idea.


He also emphasizes that the situation is far from bleak and not comparable to the financial crisis or the pandemic. The economy is expected to start recovering by 2025.


And there are still jobs to be sought:

  • The number of jobs in our job bank has clearly decreased during the fall, but there are still jobs to be found. The need is there. It's not as great as it was a year ago, but it still exists.