CH: Unemployment

Tue Sep 08 00:45:00 CDT 2015

Consensus Actual Previous
SECO (NSA) 3.1% 3.2% 3.1%
SNB (SA) 3.3% 3.3% 3.3%

The domestic labour market was slightly weaker than expected in August. Joblessness rose 3,229 or 2.4 percent on the month to 136,983 to nudge the unemployment rate a tick higher to 3.2 percent. This was up 0.2 percentage points versus a year ago, in line with the gap seen since May.

However, seasonal factors tend to boost joblessness in August and adjusted for these the number of people out of work was up a smaller 971 at 144,771. This left the adjusted jobless rate unchanged at 3.3 percent.

In fact a 2.7 percent adjusted monthly increase in vacancies, which now show an unadjusted annual decline of just 1.9 percent, suggested that firms are becoming a little more confident about the economic outlook. That said the August PMI survey found the jobs market still deteriorating sharply, albeit not as rapidly as in July. The economy may have started to grow again but only slowly and unemployment is still likely to rise further over coming months.

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.