Gold prices holding steady as ADP says 27K jobs lost in U.S. in March
(Kitco News) - Gold prices are unchanged on the day as U.S. labor market shows some resilience as private employment falls less than expected in March, according to private sector payrolls processor ADP.
Wednesday, ADP said that 27,000 jobs were lost this past month, beating expectations; consensus forecasts were calling for job losses of around 150,000.
The gold market is seeing little reaction to the data as it hovers around a critical psychological area. June gold futures last traded at $1,596.20 an ounce, unchanged on the day.
Some economists and market players have expressed some skepticism surrounding the latest employment data. Economists have noted that since mid-March the U.S. economy has basically shut down as governments urge people to stay home in an attempt to reduce the health impact of the spreading coronavirus pandemic.
The private sector data comes less than a week after the U.S. government said that weekly jobless claims rose by more than 3 million claims. Economists are expecting jobless claims to rise to 3.5 million on Thursday.
“If anything, it highlights the flaws of the survey because far more than 27K jobs were lost in the month,” said Adam Button, managing director of Forexlive.com.
Button added that he also expects the official government data, released Friday, won’t provide a true picture of the health of the labor market.
“The survey week ends March 12, before the mass lockdowns began,” he said.
Andrew Grantham, senior economist at CIBC said that he is also discounting the latest employment numbers. He added that his firm is holding steady with its expectations that Friday’s nonfarm payrolls will decline by 75,000 jobs.
“The decline in US employment has started, although the modest 27K fall in private employment measured by the ADP survey is only a fraction of what's to come in the months ahead,” he said.
“And we've noted in the past year or more that the divergence between the initial estimates of the ADP and private payrolls has been higher than normal. Given the increased volatility in both series that we will be seeing over the coming months, the average difference will likely be wider still,” he added.