Stefan Lofven says unemployed at home, including refugees, should fill jobs such as dishwashers and waiters.
Sweden's prime minister said he wants to curb the intake of foreign workers to provide more jobs for the unemployed at home, including refugees who have fled to the country in recent years.
In 2016, Sweden granted work permits to more than 12,000 people from countries outside the EU.
This figure includes around 4,000 labour workers such as cleaners, chefs, waiters and waitresses and mechanics, according to the Swedish migration board.
"Jobs that require little or no education will first be filled by the unemployed who are already in our country," Lofven said in Stockholm on Friday.
"It's unreasonable for us to have a labour migration that consists of dishwashers [and] restaurant employees when we have capable people who have arrived here as refugees."
"The first thing we will do is to emphasise that everyone who can work will work."
His comments came as he presented the Social Democrats' programme for a party congress in April, when it will lay the foundations for its 2018 election campaign.
Lofven said there were 100,000 jobs available and 300,000 people unemployed in Sweden.
Labour migration should therefore be limited to professions that required more skill, he said.
Around four percent of people in Sweden aged between 15 and 29 years old were either unemployed or not attending school in 2016, according to Statistics Sweden.
The Social Democrats run a minority government with the Green Party, which opposes the plan, making it unlikely for Sweden to restrict labour migration before the general election.
"If the Greens choose to dig their heels in and fight, then there'll be a government crisis," Jonas Hinnfors, a political science professor at the University of Gothenburg, told AFP news agency.
"It's more likely that this will be a [Social Democratic] election promise instead of forcing the Greens to agree," he said.
The Social Democrats have traditionally had a large working class voter base, and Lofven's comments were seen as an attempt to win over voters fleeing to the anti-immigration far-right Sweden Democrats.
According to a poll conducted between January 23 and February 19 by public broadcaster SVT, Sweden Democrats was the third-largest party behind the Social Democrats and the opposition conservative Moderates.
A country of almost 10 million people, Sweden took in 244,000 asylum seekers in 2014 and 2015, the highest number per capita in Europe.
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