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Gold price gains as U.S. jobs number beats expectations in February, but unemployment rate climbs

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(Kitco News) Gold moved higher after the U.S. employment data surprised on the upside last month. But the strong January number saw a slight revision down, and the February unemployment rate ticked up.

U.S. nonfarm payrolls rose by 311,000 in February, according to the Bureau of Labor Statistics. The monthly figure was above the market consensus estimate of 205,000. The robust January number was revised down from 517,000 to 504,000 positions added.

The U.S. unemployment rate climbed from 3.4% to 3.6%, surprising market consensus that expected the rate to remain the same.

The biggest job gains were reported within the leisure and hospitality, retail trade, government, and health care. Some job losses were reported in information and in transportation and warehousing.

The number of unemployed rose to 5.9 million in February.

The biggest job gains were reported in the leisure and hospitality, retail trade, government, and healthcare sectors. Job losses were seen in the information and in transportation and warehousing sectors.

The number of unemployed rose to 5.9 million in February.

"Leisure and hospitality added 105,000 jobs in February … Employment in retail trade rose by 50,000 in February … Government employment increased by 46,000 in February … The information industry lost 25,000 jobs," the report said.

The labor force participation rate was little changed at 62.5%. Year-over-year average hourly earnings, another key element of the report used to gauge future inflation, rose 4.6% last month, which was slightly below market expectations of 4.7%.

Even though the employment report showed that U.S. job growth remained elevated in February, there is some solace for the Federal Reserve before its March meeting, said Capital Economics chief North America economist Paul Ashworth.

"February's report will provide some comfort to the Fed – with the unemployment rate rebounding to 3.6%, from 3.4%, average weekly hours worked dropping back and average hourly earnings increasing by a muted 0.2% m/m. The upshot is that it looks like the 25bp/50bp debate surrounding the rate hike decision later this month will come down to February's CPI report, due next Tuesday," said Ashworth. "We still think the Fed will stick with a 25bp increase, but acknowledge that, after Powell's hawkish testimony this week, it's a very close call."

Gold climbed in response to the employment data, with April Comex gold futures last trading near daily highs of $1,848.10, up 0.74% on the day.

Live 24 hours gold chart [Kitco Inc.]

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