However, we have not yet been able to see any marked increase in employment since average working hours have risen. When there is an upturn in the economy existing staff are initially used more intensively, and only at a later stage do firms add to their workforces. Labour market indicators, however, are pointing to a gradual pick-up in employment. For instance, the number of redundancy notices is dropping and the number of new job vacancies is increasing. Relatively strong growth in domestic demand in the period ahead, in combination with the fact that it should become increasingly difficult for companies to boost output without also adding to their workforces, means that we foresee a rise in the demand for labour in the coming years. The Government’s recently announced labour market policy programmes for next year can be expected to entail that total employment will increase considerably more than regular employment. But there should also be a rise in the number of regular jobs, among other things in construction, the public sector and the private services sector. It is, as always, difficult to assess how total capacity pressures in the economy will develop in coming years, and thereby what inflation impulses we may expect from wage formation and companies' price-setting behaviour. Cost pressures have recently been low, which is partly due to the relatively high productivity growth. However, the reasons behind this are not entirely clear, which makes the assessment of future productivity growth more difficult.
Both increases in prices of consumer goods that are mainly imported – imported inflation – and increases in prices of domestically-produced goods – domestic inflation – have remained low for some time. There have probably been several different factors contributing to the low inflation in recent years, including rapid productivity growth, relatively low capacity pressures and a stronger krona. Imported inflation also appears to have been held down by import substation, i.e. a shift from imports from countries with relatively high prices to countries with relatively low prices. Clothing prices, for instance,  3/4  have shown unusually weak growth and over the past two years they have actually fallen. The EU’s new regulations for clothing and textile imports have contributed to keeping down the rate of increase for clothing prices. Furthermore, stiffer competition in the food industry has led to food prices falling. Inflation has recently been slightly higher than we had calculated on in the June Inflation Report. This is primarily due to the unexpectedly high price of oil. However, the domestic inflation rate was slightly lower during the summer than we assumed in our earlier assessment. As before, our assessment is that inflation will rise in the near future. Increased cost pressures and rising capacity pressures should contribute to an increase in domestic inflation. At the same time, the factors that have dampened inflation over the past year – rapid productivity growth and increased competition – will continue to hold back price rises.