CH: Unemployment

Tue Feb 10 00:45:00 CST 2015

Consensus Actual Previous Revised
SECO (NSA) 3.4% 3.5% 3.4%
SNB (SA) 3.2% 3.1% 3.2% 3.1%

Joblessness rose 5,377 or 2.4 percent on the month to 150,946 at the start of the year. This was enough to raise the unemployment rate a tick to 3.5 percent, its highest reading since last February. However, both increases were essentially attributable to seasonal factors and after adjustment for these, the number of people out of work climbed just 42 to 136,071 which saw the adjusted jobless rate unchanged at December's downwardly revised 3.1 percent.

Even so, signs that the labour market may be starting to weaken again were apparent in the vacancies data which showed an adjusted 144 (1.3 percent) fall on the month to stand some 21.3 percent lower on the year.

The January figures warn that the demand for labour may be about to turn down in response to worries about the economic outlook prompted by last month's change in SNB FX policy. This would be consistent with the sharp decline seen in the January PMI (to 48.2, its weakest mark since October 2012) and a clear deterioration in consumer sentiment. As the economy adjusts to the sharp appreciation of the CHF, some of the upcoming Swiss statistics could look decidedly ugly.

The unemployment rate measures the number of unemployed as a percentage of the labor force. The monthly report provides both raw and seasonally adjusted data; the latter are the more important for identifying short-term trends.

Like the employment data, unemployment data help to gauge the current state as well as the future direction of the economy. Employment data are categorized by sectors. This sector data can go a long way in helping investors determine in which economic sectors they intend to invest.

By tracking the jobs data, investors can sense the degree of tightness in the job market. If employment is tight it is a good bet that interest rates will rise and bond and stock prices will fall. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.