Swiss unemployment rate stable, inflation surge

A slight decrease

Data published by the Swiss State Secretariat for Economic Affairs on Tuesday, October 10th, showed that in September unemployment unadjusted rate remained stable at 3.0% versus 3.0% a month ago. The rate was also expected to stay at 3.0% by market analytics, so no surprise here whatsoever. A slight decrease occurred in adjusted jobless rate. It was reported at 3.1% in September, which means it dropped by a tiny 0.1% as compared to the rate of 3.2% in August. Overall, the number of unemployed in September decreased by 1,594 from the previous month to 140,535. Working force of Switzerland is strengthened by cross-border workers, which make up as much as 6.3% of total country’s working population. As data published in February showed, number of people that live abroad and commute to Switzerland for work has been on increase since 2011. In 2016 there were 11,300 cross-border workers, 3.7% more than in 2015 and an impressive 26.6% more than just five years before. Also the total number of working people is systematically rising as it reached 5.1 million at the end of 2016, a 7.8% increase in five-year period. With newest information on jobless rate being stable or even slightly lower, it looks like Swiss workforce, both residential and non-residential one, is still going strong.

Mixed CHF mood ahead of data publication

Economists were foreseeing that adjusted rate would fall to 3.0%, so the result not exactly met with their expectations, but trend is correct. The difference between expectations and reality is marginal, so is the decrease between rates as compared month to month, so Swiss Franc exchange rate shouldn’t react drastically to data. Ahead of publication, exchange rate of CHF against major rivals like USD, JPY and EUR was mixed. Against the euro and the pound, it was weaker – more investors were eager to buy euros or pounds than to buy Swiss Francs. Whereas against the US dollar or the Japanese yen, the Swiss Franc held steady, showing quite good exchange rate. Just ahead of reporting of jobless rate, CHF was trading at 1.1516 against EUR, 1.2885 against GBP, 0.9784 against USD and 115.13 against JPY.

Inflation accelerated more than expected

In recent days, also other important market data was published as the Swiss Federal Statistics Office gave update on inflation rate in September on October 5. Swiss inflation rate accelerated to a highest point since 2011. Consumer prices increased by 0.7% on a year to year basis, as compared to a 0.5% gain in the previous month. Inflation rate beat market expectations of 0.6%. On a monthly basis, inflation rate rose by 0.2%, which is line with market expectations. In August consumer prices show no change month-to-month. Reasons for increase of prices on a yearly basis were mainly changes in clothing and footwear segment. Cost grew also for food, non-alcoholic beverages, transport, recreation and culture, restaurants and hotels, housing and utilities. Only prices of health fell down. On a monthly basis, also prices for clothing and footwear showed the biggest gain with furnishings, household equipment, housing and utilities rising as well, but recreation and culture, transport slightly going down.