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Gold price remains under pressure as ADP says 132K US jobs created in August
(Kitco News) - Gold prices remain under pressure even as private sector employment rose less than expected in August, according to the latest employment data from private payrolls processor ADP.
The latest private sector data showed 132,000 jobs were created last month. The data missed expectations as economists were looking for an increase of 300,000 jobs.
"“Our data suggests a shift toward a more conservative pace of hiring, possibly as companies try to decipher the economy's conflicting signals,” said Nela Richardson, chief economist, ADP. “We could be at an inflection point, from super-charged job gains to something more normal.
The gold market is not seeing much reaction to the disappointing labor market data as prices continue to push further from $1,750 an ounce. December gold futures last traded at $1,723.70 an ounce, down 0.73% on the day.
This is the ADP’s first jobs market report after taking a months long hiatus to revamp its methodology. Previously economists used ADP as an estimate for the official government numbers, which will be released Friday. However, the private sector payroll was never a consistent predictor for nonfarm payrolls.
In its updated report, ADP is trying to move away from being an estimate of nonfarm payrolls and provide its own views on the US jobs market. The report is now jointly developed with the Stanford Digital Economy Lab. It now includes a new wages measure.
Looking at a breakdown of the labor market, the report said that the goods producing sector saw job growth of 23,000. The service sector saw job gains of 110,000; trade, transportation and utilities increased by 54,000 jobs; the information sector saw job losses of 1,000 positions. Jobs in the financial sector fell by 20,000. Within the professional and business service sectors jobs fell by 14,000. The education and health sectors saw job losses of 15,000 and the hospitality sector reported job gains of 96,000.
The report said that small business saw job gains of 25,000. At the same time, medium sized businesses saw job growth of 53,000 and large corporations reported job gains of 54,000.
Looking at wages, the report said that salaries increased 7.6% compared to last year.
“While the pace of pay increases is elevated, its growth has flattened,” the report said.
