Retail sales in Switzerland

Retail sales in Switzerland rose 1.2% in January after advancing 3.6% in the previous month, and households are likely to cut back on spending as they face a weakening labor market. The breakdown of the report showed that spending of food increased 5.9%, while demands for electronic goods rose 9.8% however, spending on personal goods plunged 12.1% during the month, while discretionary spending on clothing and shoes slipped 3.4%. Easing price pressures have certainly helped to boost consumer demands as retailers continue to conduct heavy discounting in an effort to lure potential shoppers however, as the region faces its first recession in six-years, the economic outlook remain bleak. As a result, the SNB is likely to ease policy further and may take unprecedented steps to mitigate the downside risks for growth and inflation as the downturn in the global economy intensifies.