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Updated: U.S. Economy Creates 248K Jobs In September

By Kitco News
Friday October 3, 2014 8:30 AM

Editor's Note: The article was updated to include more information from the report and reaction from Jim Wyckoff. The article was updated a second time to include comments from CIBC and Capital Economics.

(Kitco News) - The U.S. labor market found some renewed momentum in September, creating more than 200,000 jobs and making up for a disappointing August, according to the latest data from the U.S. Labor Department.

Friday, the department said that 248,000 jobs were created in September, up from August’s revised level of 180,000; August’s initial report said 142,000 jobs were created. July's employment number were also revised signficantly higher to 243,000 fromthe previous report of 212,000.

Jim Wyckoff, senior technical analyst at Kitco.com noted that the stronger-than expected report pushed gold prices below key support at $1,200 an ounce.

Optimism was relatively high heading into September’s jobs report as many traders dismissed August’s numbers as a “blip” in a recovery labor market. According to consensus reports, economists were expecting to see between 216,000 and 230,000 jobs created last month.

Adding to the optimism was Wednesday’s private sector payrolls data, compiled by payrolls processor ADP. The report said that corporations and businesses created 213,000 jobs in September.

The unemployment rate for September dropped to 5.9%, compared to 6.1% in August. Economists were expecting the unemployment rate to remain unchanged in September. The civilian labor force participation rate was at 62.7% in September.

Economists have also been paying close attention to wages as it is an inflation indication. The Labor Department said that average hourly earnings dropped 1% in September to $24.53 an hour, compared to August's report.

"Over the year, average hourly earnings have risen by 2.0 percent," the report said.

At the same time, the average workweek edged up by 0.1 hour to 34.6 hours.

Paul Dales,senior U.S. economist at Capital Economics, said September’s stronger-than-expected report adds further evidence to their forecast that the Federal Reserve will start to hike rates earlier sooner rather than later. Capital Economics has been expecting the Fed to start raising rates by March 2015.

Dales added the September data also confirms that August’s initial report appeared to be an aberration in the data. “We always said that the easing in August seemed odd when all the other labor market data had stayed strong and that’s proven to be the case,” he said.

Avery Shenfeld, senior economist at CIBC World Markets, agreed that the September data lends more support for the Fed to start hiking rates in March. Shenfeld added that the only soft spot in the report was on wages; however, this fits Fed’s stance on inflation.

Looking at specifically the mining industry, the report said that employment within the sector rose by 9,000 jobs last month, with most of the jobs coming from support activities. The labor department said that so far this year the mining industry has created 50,000 jobs.

By Neils Christensen of Kitco News; nchristensen@kitco.com



Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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