Inflation in Switzerland has shown a continuous downward trend.

The Swiss franc has been weakening steadily, pressured by the rapidly strengthening U.S. dollar. This follows the release of robust U.S. economic data, leading investors to predict that the Federal Reserve will likely delay rate cuts next year. Additionally, investors remain cautious about potential inflationary effects from policies under Donald Trump.

Swiss National Bank (SNB) President Martin Schlegel reiterated the bank's focus on core inflation as a basis for monetary policy decisions. He emphasized that inflation should remain within the 0-2% range, which would help strengthen the domestic economy. The recent decline in inflation has fueled market expectations that the SNB might lower interest rates further this year and continue to do so through 2025 to mitigate deflationary risks.

Economic indicators in Switzerland dropped to 99.5 in October 2024, down from 104.5 in September, below the market forecast of 105. This marks the first time since January that the index has fallen below 100, signaling a continued economic slowdown. Manufacturing indicators showed significant declines, while the services sector also slowed due to persistently rising production costs. Meanwhile, demand-side indicators, such as foreign and consumer demand, have not shown substantial growth.

Retail sales in Switzerland increased by 2.2% year-on-year in September, slowing from 2.7% growth in August. Sales in most categories declined slightly, particularly for food, beverages, and tobacco, which fell by 0.4% compared to 2.2% growth the previous month. Conversely, sales of non-food products accelerated by 6%, but their overall contribution was smaller than food sales, resulting in only modest growth in retail sales.

Inflation in Switzerland eased to 0.6% year-on-year in October, the lowest level since 2021 and below the forecast of 0.8%. Inflation slowed slightly in housing and energy sectors, with gasoline prices dropping by over 2.8%. This led to a sharp deceleration in transportation costs, which fell to 2.7%, helping reduce energy-related costs in other sectors.

The unemployment rate remained steady at 2.5% in October, with the number of unemployed rising by 3,202 from the previous month, reaching a 32-month high of 116,447. However, youth unemployment, measured among job seekers aged 15-24, decreased to 2.6% from 2.7% the previous month, with 336 fewer unemployed youth, totaling 11,621. Meanwhile, job vacancies decreased by 3,849 positions to 34,471, reflecting companies’ intent to cut labor costs.

Switzerland's consumer confidence index improved to -37 in October, up from -52.5 a year ago, though it fell short of market expectations of -33. This indicates a slightly less pessimistic outlook on the economic future. However, personal financial expectations have shown a more positive trend, as financial burdens continue to show consistent signs of easing.