Gold Price Surges Higher Following Big Miss in US Employment 235K Jobs Created in August
The comments below are an edited and abridged synopsis of an article by Neils Christensen
Gold is pushing higher following a significant miss in the US labour market with fewer jobs created in August.
The U.S. Labor Department said that 235,000 jobs were created last month. The data was weaker than expected as consensus forecasts called for jobs gains of 720,000.
While the headline data saw a significant miss, the Labor Department included substantial revisions to its June and July numbers. June’s employment numbers were revised up by 24,000 to 962,000 from the previous estimate of 938,000. Meanwhile, July’s data was revised up to 1.053 million jobs compared to the initial estimate of 943,000.
However, some economists note that the strong revisions are not enough to take the sting out of the disappointing headline numbers.
Meanwhile, the US unemployment rate dropped to 5.2%, down from July’s reading of 5.4%. The unemployment rate fell in line with expectations.
Gold has broken through critical near-term support levels in initial reaction to the weaker-than-expected employment data. December gold futures last traded at $1,827.10, up nearly 1% on the day.
Not only was job growth weaker last month but, positive for gold, wage inflation continues to creep higher. The report said that wages rose 0.6% in August, up from July’s 0.4% increase. Economists were expecting to see a 0.3% increase.
A lot of focus had been placed on the August employment numbers. Many Fed officials noted that a strong number could prompt them to reduce their monthly bond purchases. However, some economists say the disappointing data could force the central bank to delay those plans.
The latest employment numbers put the Fed in a difficult position. The economic data shows the Covid-19 pandemic and the spreading delta variant is affecting the current recovery.
