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Jobless rate falls as economy grows

Young people aged 15 to 24 are making the strongest gains Keystone

The unemployment rate in Switzerland has fallen for the fourth month in a row, bettering analysts’ predictions that it would stay flat in May.

This content was published on June 8, 2004 - 13:19

The government said on Tuesday that the creation of 6,245 jobs in a month was a sign of growing employer confidence as the economy gathers steam.

The rate stood at 3.8 per cent in May, down from 3.9 per cent the previous month, according to the State Secretariat for Economic Affairs (Seco). The number of registered unemployed was 148,816.

“That was a positive surprise,” said Astrid Frey, economist with Bank Sarasin. “The employment market has already turned. Now we are seeing a slow, modest recovery.”

Despite growing confidence about the shape of the economy, the Swiss National Bank (SNB) is expected to leave interest rates at record near-zero lows at its quarterly policy review on June 17.

“The fact that the jobless rate is only recovering modestly is a signal that the SNB does not need to rush to a rate hike,” added Frey.

Many analysts see the central bank raising rates later in the year. But the bank has said it will not do so until recovery is well underway.

Better prospects

Young workers, who suffered disproportionately during the downturn, saw their prospects pick up last month.

The number of 15- to 19-year-olds out of work fell by 9.4 per cent compared with a four per cent drop across all age groups. Those aged 20 to 24 enjoyed a 7.3 per cent fall in joblessness.

“Declines in unemployment in May were due to seasonal factors as in previous months,” explained Jean-Luc Nordmann, head of Seco’s labour division.

Nordmann added that the current employment situation was a big improvement on last year.

The number of people out of work fell by 20,000 over the first five months of 2004, whereas it rose by 2,000 over the same period last year.

Disappointment

However, Seco said the good news masked two disappointing sets of figures.

The number of people unemployed for more than a year grew in May, and they now make up almost a fifth of those without a job.

And the number of people who have reached the end of their benefits period was also up markedly.

In March, Seco registered 3,172 people who are no longer eligible for benefits – up from 2,737 in February.

swissinfo with agencies

Key facts

The jobless rate fell across the country last month as 6,245 jobs were created.
The overall rate was 3.8%.
In French- and Italian-speaking Switzerland, the rate was 4.8%.
In German-speaking Switzerland it stood at 3.4%.

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