Sweden’s unemployment rate fell to 7.8% in July from a revised 9.9% in June, marking a sharp monthly improvement and the lowest level since November 2024. Existing annual data show the rate was 8.0% in July 2025, with the number of unemployed people down 6,400 over the year to 467,700. Unemployment remained elevated among younger people at 16.1%, while long-term unemployment reached 144,000. The July decline may reflect seasonal hiring in tourism, outdoor activities and other summer services, although the available data do not identify the specific drivers. A stronger labor market could support household spending but may also complicate the Riksbank’s decisions on interest-rate cuts if employment conditions add to inflationary pressure. Observers will watch whether the improvement is sustained beyond the summer season.