CH: Unemployment

Tue Mar 10 01:45:00 CDT 2015

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

Unadjusted joblessness fell 1,205 to 149,921 in February to leave the unemployment rate unchanged on both the month and the year at 3.5 percent. However, seasonally adjusted the number of people out of work was up 958 versus January at 137,820. This was small enough to leave the adjusted rate steady on the month but only after January's reading had been revised a tick higher to 3.2 percent. The results were broadly in keeping with market expectations.

There was also a fresh decline in vacancies which saw a 280 drop from the start of the year and now stand nearly 27 percent below their level in February 2014. This warns that the demand for labour is contracting and suggests that there is probably bad news for employment in the pipeline.

The labour market had been flatlining for some months but the signs are that the sharp appreciation of the CHF since mid-January is starting to take its toll. First quarter GDP growth will be weak and it may well be that the unemployment rate has already bottomed for the year.

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.