CH: Unemployment

Fri May 08 00:45:00 CDT 2015

Consensus Actual Previous
SECO (NSA) 3.3% 3.3% 3.4%
SNB (SA) 3.3% 3.3% 3.2%

Unadjusted joblessness fell 3,977 to 141,131 last month to nudge the unemployment rate a tick lower to 3.3 percent. However, seasonal factors are strongly supportive of employment in April and seasonally adjusted the number of people out of work actually rose 1,330 to 140,615 and in so doing lifted the adjusted jobless rate from 3.2 percent to 3.3 percent, its highest level in more than four years. The results were in line with market expectations.

The adjusted increase in unemployment was accompanied by a 2.2 percent bounce in vacancies which now show a fall of some 27.5 percent on the year.

The weakness of the April data will come as little surprise in the wake of what looks to have been a very poor first quarter for Swiss GDP. The abandonment by the SNB of its minimum EUR/CHF1.20 FX target in January has hit confidence in a number of sectors and, as the April PMI released on Monday indicated, has made firms very cautious about their hiring plans. May's report is unlikely to be much better despite some signs that the economy has started to come to terms with a much stronger local currency.

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.