Unemployment fell an unadjusted 4,813 or 3.2 percent on the month to 145,108 in March. The decline was steep enough to reduce the jobless rate by 0.1 percentage points to 3.4 percent. However, the fall was essentially wholly attributable to seasonal factors and adjusted for these the number of people out of work rose 1,365 or 1.0 percent to 139,385. Seasonally adjusted the unemployment rate was again unchanged at 3.2 percent. The results were much as expected.
Looking ahead, developments in vacancies were not promising. A seasonally adjusted monthly fall of 2.2 percent equated with an annual decline of some 30.9 percent and suggests that the demand for labour is on the wane.
Today's report is consistent with the March PMI survey where the employment sub-index slumped to just 43.6, well short of the 50 growth threshold and its lowest level since October 2009. Other recent indicators have pointed to some stabilisation in the Swiss economy but the reversal in the labour market threatens to undermine this by prompting a potentially sizeable cutback in household spending.
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.
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