Swiss Unemployment Rises to Highest in Almost 5 Years

Swiss unemployment increased to the highest in almost five years in July as a slump in exports prompted companies to eliminate jobs

The seasonally adjusted jobless rate climbed to 3.9 percent from 3.8 percent in June, the State Secretariat for Economic Affairs said today. That was the highest since September 2004.

Swiss companies are reducing headcount as the worst global recession since World War II causes exports to plummet and private consumption to stumble. Exports fell for a second month in June and retail sales dropped in May. The Alpine country’s financial industry will probably scrap more jobs, an indicator released this week by the KOF research institute showed.

The Swiss government estimates that the country’s gross domestic product will shrink 2.7 percent this year, which would be the sharpest decline in at least three decades. The economy may contract a further 0.4 percent in 2010, the State Secretariat for Economic Affairs said on June 17. Unemployment will average 3.8 percent in 2009 and 5.5 percent next year, according to government forecasts.

The number of people out of work rose by 4,502 to 154,972 in July when adjusted for seasonal swings, today’s report showed. The unadjusted jobless rate increased to 3.7 percent from 3.6 percent in the previous month and the number of open jobs was 14,370, according to the state secretariat.

While the rise in unemployment mainly reflects the economic contraction, some indicators signal the Swiss economy might be pulling out of the recession. The leading economic indicators rose for a second month in June and manufacturing shrank at the slowest pace in nine months in July., Bloomberg
8/7/2009 9:28:50 AM