(Kitco News) – Gold prices are holding relatively steady, hovering above the psychological level of $1,200 an ounce as the U.S. labor market showed a mixed picture last month.
The Bureau of Labor Statistics said 134,000 jobs were created in September, economists were expecting to see job gains of around 185,000. While the data came in weaker than expected, the report noted higher revision in July and August. July’s numbers were revised up to 165,000 jobs from the previous estimate of 147,000; at the same time August’s job number was revised up to 270,000 from the initial estimate of 201,000.
Some economist have dismissed weakness in the employment numbers, saying the data was impacted by Hurricane Florence, which hit the east coast in mid-September.
At the same time the unemployment rate came in at 3.7%, down significantly from August. The data beat expectations as economists forecasted a drop to 3.8%. Analysts noted that this is the lowest unemployment rate since 1969.
Gold prices were modestly higher ahead of the report and have managed to hold on to gains as the market sees little movement in initial reaction. Spot gold last traded at $1,201.90 an ounce, up 0.18%% on the day.
Along with the headline employment data, markets are closely watching wage numbers, which increased last month in line with expectations. The report said that average hourly wages increased by 8 cents to $27.24. In the last 12 months wages increased 2.8%.
Andrew Grantham, senior economist at CIBC described September’s employment report as “solid,” despite the weaker than expected headline number.
“Today’s results are still consistent with a strong US economy and gradually accelerating inflationary pressures,” he said. “Wage growth, which picked up in the prior month, came in line with expectations with hourly earnings rising 0.3% on the month for an annual rate of 2.8%. While that annual rate is a tick lower than the prior month, there is a soft monthly print falling out of the calculation next month and as such wage growth could soon break above 3% for the first time.”
By Neils Christensen
For Kitco News