| Actual | Previous | |
| Month over Month | 0.2% | 0.6% |
| Year over Year | 0.3% | 0.1% |
Highlights
Consumer prices rose 0.2 percent in March month-on-month, and were 0.3 percent higher than a year ago. Core inflation which excludes fresh food and seasonal products, energy, and fuel were unchanged from a month ago and 0.4 percent higher year-on-year.
Prices for heating oil spiked 31.0 percent from February and were 21.8 percent higher from March of last year, while diesel fuel prices rose 7.3 percent month-on-month and 3.5 percent year on year. as the conflict in the Middle East is being felt.
This led to higher import prices, which rose 1.8 percent from last month. They were however, 0.3 percent lower than a year ago. With oil denominated in US dollars, the strength of the Swiss franc is helping keep prices somewhat in check.
Prices for goods were up 0.8 percent in March from a month ago, with those for durable goods up 0.5 percent. Non-durables were 0.7 percent more expensive, while semi-durables were 1.9 percent higher. Services prices were down 0.1 percent month-on month.
While Switzerland has not been spared the effects of the conflict in the Middle East, overall prices are quite subdued in relation to other European economies, many of which are seeing year-on-year CPI exceeding 2.0 percent.
Definition
The consumer price index (CPI) is an average measure of the level of the prices of goods and services bought for the purpose of consumption by Swiss households. Monthly and annual changes in the CPI provide widely used measures of inflation. The policy target measure for the Swiss National Bank (SNB), the annual CPI rate can be distorted by swings in prices amongst the more volatile subsectors and the CPI excluding fresh food and energy is used as a better guide to underlying short-term trends. Although not a member of the Eurozone, a harmonized index of consumer prices (HICP), measured according to Eurostat's procedures, is also published alongside the CPI.
Description
The consumer price index is the most widely followed indicator of inflation. An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact. Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets- and your investments. Inflation (along with various risks) basically explains how interest rates are set on everything from loans to notes and bonds. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities, and your portfolio, often in a dramatic fashion. By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.