Swiss consumers are the most negative they have been since April, as seen in the index of consumer confidence which fell to minus 40 in August from minus 33 in July, expressing far more pessimism about future economic developments.

After improving for the past three month, the outlook for the economy fell to 66 in August from 36 in July. The same dynamic was seen for future price developments where consumers were increasingly more sanguine in the past three months, but the index rose to 105 from 96 in July.

On whether it is a good time to purchase big-ticket items, consumers were upbeat with the index rising to minus 24 in August from minus 26 the month before to the highest level since at least January 2023. Conversely, expectations for making a major purchase in the future fell to minus 55 during August from minus 51 in July.

Consumers are clearly worried about jobs, expressing more pessimism about job security with that component falling to minus 50 in August to its lowest reading since at least January 2023, from minus 47 in July. They also expect the unemployment rate to climb. With a reading of 65 in August, up from 47 in July, the result is more than double the long-term average of 31.

With no resolution in obvious sight for the tariff spat with the US, consumers are more downbeat and likely to remain so absent either a trade agreement with the US or the US Supreme Court agreeing with an appeals court most of the tariffs are illegal.

The State Secretariat for Economic Affairs (SECO) compiles a quarterly survey of consumer attitudes on present and expected economic and financial conditions. The survey covers around 1,200 Swiss households and results are synthesised into a single summary consumer climate index that attempts to measure consumer sentiment.

The pattern in consumer attitudes and spending is often a major influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth. Consumer spending accounts for a major portion of the Swiss economy, so investors want to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. An increasing important element of the survey is the question concerning current buying intentions.