There is a little less activity in the offices in Switzerland and more in the USA (Image: shutterstock).
In Switzerland, the trend towards rising unemployment figures continues. The State Secretariat for Economic Affairs (Seco) is talking about a normalization of the situation on the labor market, after the very low rates of recent years. On the other hand, the USA surprises with good labor market data.
In September 2024, the unemployment rate in this country increased slightly to 2.5 percent after 2.4 percent in August, as the Seco announced on Friday. From April to July the rate was 2.3 percent; in September of the previous year it was a very low 2.0 percent. And in the same month of 2022 it was only 1.9 percent.
RAV reports more unemployed people
“The trend of slightly increasing unemployment continued in September, as we expected,” Jean-Christophe Lanzeray, head of the audit service of the Labor Directorate and deputy head of the labor market and unemployment insurance department at Seco, told AWP in a telephone conference.
At the end of September, a total of 113,245 people were registered as unemployed in the regional employment centers (RAV). That was 1,891 more than in August and 22,419 more than the previous year. The unemployment rate, adjusted for seasonal effects, also rose by 0.1 points to 2.6 percent compared to the previous month. Seasonal fluctuations can be observed particularly in sectors such as construction or tourism.
Falling watch exports are becoming noticeable
In the Seco statistics there are some areas that are facing higher unemployment. This includes the hospitality industry (rate: 4.9 percent) and, above all, the watch industry (5.5 percent). In the latter, the unemployment rate was just 3.0 percent a year ago.
The weakening demand for watches in some international markets is known and is also reflected in the unemployment statistics, Lanzeray noted. Swiss watch manufacturers were able to export significantly fewer timepieces this year, especially to China and Hong Kong. The problems in the watch industry are also reflected in the latest information on short-time work. Of the short-time work applications approved by Seco, which rose to a good 20,000 employees in September, many are based in this industry.
Less short-time work, more job seekers
In contrast, the figures for short-time work billed in July, which were communicated with a delay, have declined: the number of people affected by short-time work fell to 2,566 from 6,265 in June and the number of companies affected fell by 121 to 198. Fits well into the cloudy overall picture that more people in Switzerland are currently looking for jobs. In September, the number of job seekers increased by 4,137 to 184,373 within a month. Compared to the previous year, there were a fifth more job seekers.
“We will see a further slight increase in unemployment in the coming months, mainly due to seasonal effects,” said Lanzeray. However, the demand for workers has cooled somewhat due to the weaker economic situation. Overall, in its forecast for 2024 issued in mid-September, Seco expects an average unemployment rate of 2.4 percent and an increase to 2.6 percent in 2025.
254,000 new jobs in the USA
The US economic engine is ensuring an improvement in international investor sentiment. According to the Labor Department, the US economy created 254,000 new jobs. Economists had only expected 150,000. In addition, the unemployment rate fell and hourly wages increased more than expected.
This dampened interest rate cut fantasies in the USA, caused the US dollar to gain significantly against the euro and franc on Friday and led to an improvement in sentiment on the stock markets. All three New York indices managed to make up for the losses of the last few days and ended the week with a slightly positive balance. It didn’t look like that for a long time, as the escalation in the Middle East had had a noticeable impact in the past few days.
US interest rate cuts expected to be less severe
“In the USA there are still no signals of a recession from the labor market,” said analyst Konstantin Oldenburger from broker CMC Markets to AWP. “If this level of robustness remains, there are likely to be less severe interest rate cuts from the Fed in the near future. However, the fact that there will still be gradual steps downwards as the economy continues to grow is worth more than absolutely necessary monetary easing without it Growth.”
