The jobless rate decreased by 0.2 per cent to 4.2 per cent in March, according to the State Secretariat for Economic Affairs (Seco).

It is the biggest March decrease in three years, said Seco's labour division head Serge Gaillard.

Just over 166,000 people were registered as unemployed. Most of them are foreigners, a Seco statement said on Thursday.

The jobless rate among younger people dropped significantly to 4.8 per cent last month compared with February.

Gaillard warned against too much optimism.

"Certain sectors of the industry are recovering faster than others," he said.

He added that the economic situation in Europe remained uncertain.

The figures come amid increasingly optimistic forecasts about the Swiss economy for this year.

The government expects the economy to grow by 1.4 per cent, an improvement on its earlier forecast of 0.7 per cent.

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