CH: Unemployment

Fri Apr 08 00:45:00 CDT 2016

Consensus Actual Previous
SECO (NSA) 3.6% 3.6% 3.7%
SNB (SA) 3.5% 3.5% 3.4%

The labour market deteriorated in line with expectations in March. Unadjusted joblessness actually fell some 6,093 or 3.8 percent to 155,324 to reduce the unemployment rate a tick to 3.6 percent. However, seasonal factors are very friendly in March and the adjusted data showed the number of people out of work rising 636 (0.4 percent) to 149,566 which was enough to lift the adjusted rate from 3.4 percent to 3.5 percent.

The outlook also worsened as adjusted vacancies fell 0.5 percent on the month although, in unadjusted terms, this still produced a rise of 1.9 percent on the year.

Today's figures are consistent with the likes of the PMI survey which, while pointing to some general improvement in economic conditions, has continued to find businesses shedding labour in an effort to remain competitive. The ongoing weakness of the labour market will inevitably help to keep a lid on wages which, in turn, will make the SNB's job of getting inflation back into positive territory all the more complicated.

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.