Swiss employment growth slows in Q3

 ZURICH, Nov 27 (Reuters) - Employment growth in Switzerland slowed in the third quarter and is likely to continue to weaken as the economy cools, data showed on Thursday.

Switzerland's non-farm payrolls rose 2.0 percent year-on-year in the third quarter to 3.956 million compared with growth of 2.4 percent in the previous three months, the Federal Statistics Office said.

The statistics office said the forward-looking indices pointed to a further slowing of employment growth as the outlook index fell 2.7 percent to 1.04 points, while the index of vacancies rose 0.5 percent to 207.3 points.

The survey among manufacturers for the Swiss Purchasing Managers' Index in October showed that firms cut back staff for the first time since 2005, while the unadjusted Swiss unemployment rate inched up in the month to 2.5 percent.

Switzerland is in the middle of a severe economic crisis and will see negative growth next year, Swiss National Bank board member Philipp Hildebrand was quoted on Wednesday as saying.

The SNB slashed rates last Thursday by a surprise full percentage point and analysts expect the SNB to cut again, possibly as early as next month.

Jan-Egbert Sturm, head of the KOF Swiss Economic Institute that produces the leading growth barometer, said the bank could cut by another 25 basis points in December.

"In theory there is still room to cut. A further central bank interest rate step downwards is therefore not unlikely, perhaps there will be a rate cut still this year," Sturm told the Basler Zeitung daily in an interview.

The November KOF indicator, which points to the economy's likely performance in six months' time, is due out on Friday. (Reporting by Emma Thomasson; Editing by Ruth Pitchford)