Swiss Retail Sales Rebounds, Led by Food And Apparel Purchases

Swiss retail sales rose 7.4% in May rebounding from a 9.4% decline the month prior, as consumer consumption remained resilient despite the slowing economy. An 8.2% increase in food purchases and a 7.2% improvement in clothing sales after slumping 24.7% in May led to the results beating economist expectations of 3.8%. The lowest unemployment rate in almost six years has led to increasing wages which has boosted spending. However, expectations are that the headwinds from the slowing global economy and rising inflation will eventually weigh on Swiss consumption. The SNB has left their benchmark rate unchanged as they anticipate growth to slow to 1.5% from 3.1% in 2007, reducing the upside risks of inflation. Therefore, expectations are that the central bank may keep rates on hold for the remainder of the year. – John Rivera, Currency Analyst