In an interview with newspaper Dagens Nyheter, Löfven said last year's agreement on labour immigration between the centre-right government and the Green Party has made the Swedish job market harder to enter for those already here.
The change "in fact increased the number of people in the job market by more than 10,000 per year," Löfven said, adding: "It doesn't simplify the problem."
Reactions poured in on social media websites Sunday, with Sweden's Migration Minister Tobias Billström speaking out against Löfven's statements, saying labour immigrants make up only a small segment of the Swedish job market.
"I cannot imagine this being the important issue when there are so many other things to discuss within migration," Billström, who represents the Moderate Party, told news agency TT.
On Twitter, users blamed Löfven for co-opting the anti-immigration Sweden Democrats' rhetoric by claiming that immigration leads to a domestic job shortage. "Merry Christmas, Stefan Löfven, and I hope no labour immigrant takes your job," wrote the user Pierre Ringborg.