Unemployment rises slightly again in August

Published: Thursday, Sep 5th 2024, 09:52

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The number of unemployed people in Switzerland increased again in August. However, there are also initial positive signs on the labor market.

At the end of August, 111,354 people were registered as unemployed in the regional employment centers (RAV), as reported by the State Secretariat for Economic Affairs (Seco) on Thursday. This was 3638 more than in July. As a result, the rate rose to 2.4 percent from 2.3 percent in the previous month of July.

Adjusted for seasonal effects, the number of unemployed rose by 1,831 people. The adjusted unemployment rate therefore remained at 2.5%.

Watch industry stands out negatively

It is well known that the mechanical, electrical and metal industries and the watchmaking industry in particular have been suffering from subdued international demand for months. The watch industry currently has the highest unemployment rate of all sectors at 5.4%.

There were also special effects in August. For example, the number of young unemployed (15 to 24-year-olds) rose by 2,000. This is usual for this month because many young people enter the job market after completing their training. This "annually recurring phenomenon" was not out of the ordinary this year, said Zürcher.

Under neutral quota

The Seco man still sees the slight increase as a "gradual normalization", which follows the very low unemployment of the post-corona boom. The current figure of just over 111,000 unemployed is a good 21,000 higher than the previous year's figure. However, it does not stand out negatively in a long-term comparison.

On the contrary, the rate is still relatively low, according to Zürcher. He sees the "neutral unemployment rate", where supply and demand are in balance, at 2.8 percent. "Anything below that is good."

Trend reversal in sight?

And there are now also initial indications of an improvement in the situation on the labor market. He said that the seasonally adjusted increase had only continued "slightly weakened" in August.

And short-time work fell significantly in June - the data is reported with a delay. The number of people affected fell by 2,480 to 3,871. Despite the problems in the second sector, short-time working is not a widespread phenomenon, said Zürcher. It is primarily used by companies that find themselves in a particularly difficult situation.

Overall, it is possible that the situation has recently been assessed as somewhat worse than it actually is, said Zürcher. The recently published data on economic development also speaks for this.

Nevertheless, he did not want to speak of a turnaround in the labor market just yet. "One swallow does not make a spring." He therefore still expects unemployment to average 2.4 percent in 2024.

©Keystone/SDA

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