(Kitco News) - The U.S. labor market remains volatile as more workers than expected applied first-time benefits last week, seeing a solid rise from the previous week’s six-month low.
Thursday, the U.S. Labor Department said that weekly jobless claims jumped by 29,000 to 219,000, up from the previous week's revised estimate of 193,000 claims.
The latest labor market data missed expectations. According to consensus forecasts, economists were expecting to see jobless claims rise at a slower pace to 205,000.
The gold market is holding steady gains following the miss in the latest labor market data. December gold futures last traded at $1,726.10 an ounce, up 0.30% on the day.
The four-week moving average for new claims – often viewed as a more reliable measure of the labor market since it flattens week-to-week volatility – rose slightly to 206,500, up by 250 claims from the previous week's revised average.
Continuing jobless claims, which represent the number of people already receiving benefits, were at 1.361 million during the week ending Sept. 24, rising by 15,000 from the previous week's revised level.
The labor market has been sending some fairly mixed signals this past week.Wenesday, private sector payrolls processor ADP said that 208,000 private sector jobs were created in September, slightly beating expectations. However, Tuesday, the Labor Departments JOLTS survey showed that the number of job openings in August dropped by more than one million. It was the biggest drop in job openings since April 2020 when the global economy was rocked by the COVID-19 pandemic.
Markets are currently focused on Friday's nonfarm payrolls number. According to consensus forecasts, economists are expecting that 265,000 jobs were created in September.
While the U.S. labor market has been fairly resilient through 2020, many economists have said that it is only a matter of time before it weakens as the Federal Reserve continues to aggressively raise interest rates.
The Federal Reserve has said that it needs to cool down the labor market to bring inflation down to 2%.
"If we want to set ourselves up really light the way to another period of a very strong labor market, we have got to get inflation behind us. I wish there were a painless way to do that, there isn't. So, what we need to do is get rates up to the point where we're putting meaningful downward pressure on inflation, and that's what we're doing," said Federal Reserve Chair Jerome Powell after the U.S. central bank's raised interest rates by 75 basis points last month.
