| Actual | Previous | |
| Month over Month | -0.1% | 0.0% |
| Year over Year | 0.4% | 0.5% |
Highlights
Consumer prices fell in July on a seasonally adjusted basis, down 0.1 percent from June, while they were 0.4 percent higher than a year ago, as prices for imported products offset higher domestic inflation.
Domestic inflation was 0.1 percent higher than the previous month while 0.5 percent higher year-on-year, while import prices fell 1.1 percent from June and were the same level as July of last year. Overall prices excluding energy, fuel and seasonal products was down 0.1 percent month-on-month and 0.3 percent higher than a year ago.
Prices for international air travel also had a mitigating effect on the overall index, having fallen 4.3 percent year-on-year, while rising 4.9 percent year-on-year. Prices for diesel fuel fell 5.8 percent in July while gasoline was 2.4 percent lower. Compared to a year-ago prices for the two fuels were up 11.4 percent and 8.1 percent, respectively.
Consumers paid less for goods in July, with prices 0.7 percent lower in July than in June and 0.5 percent below their levels from a year ago. Services on the other hand were higher, gaining 0.2 percent from June and 0.9 percent year-on-year.
The harmonized index of consumer prices which is uses the same methodology in order to compare prices across European economies was 0.3 percent higher in July and 0.7 percent year-on-year. This shows that Switzerland is in an enviable position in terms of inflation compared to other continental economies. The strong Swiss franc continues to help keep price increases at bay, particularly those for dollar-denominated products such as petroleum and its derivatives.
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.