(RTTNews) - The Swiss UBS consumption indicator slipped to a reading of 1.91 in May, from 2.16 in the previous month, the UBS said, Tuesday. The indicator was at 2.25 level in March. Private consumption is by far the most important component of the Swiss economy and accounts for 61% of the GDP. Economists expect private consumption to expand 1.8% in the current year.

The UBS Consumption Indicator is derived from five sub-induces. They are the sub-indices for new car sales, business activity in the retail sector, the number of domestic hotel overnight stays by Swiss nationals, the consumer sentiment index and credit card transactions via UBS points of sale in Switzerland.

In May, the Indicator was pulled down by a slide in the consumer sentiment index as well as weakness in the business activity in the retail sector. Yet both indicators still pointed towards continued expansion, the UBS said. The sub-indicator for overnight hotel stays showed a slight decline, while the sub-indicator for new car sales rose 1.6% on an annual basis and the sub-indicator for credit card transactions via UBS points of sale moved up.

Despite the fall in May, the consumption indicator still remained above its long-term average of 1.50, the UBS pointed out. This indicated that Swiss consumer spending was healthy, while the outlook for the labor market continued to be positive and household incomes were projected to rise. The only dampener to the positive sentiment was the rising inflation, though UBS economists expect price increases to moderate as the year winds down.

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Posted in Categories: Economy, Releases, Switzerland, USA.

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