(Kitco News) - The U.S. labor market continues to cool as private companies hire fewer workers than expected in February, according to the latest report from private payroll processor ADP.
Wednesday, ADP said that 140,000 jobs were created last month. The report missed expectations as consensus forecasts called for job gains of 149,000.
APD employment has missed economists’ expectations in six out of the last seven months.
“Job gains remain solid. Pay gains are trending lower but are still above inflation,” said Nela Richardson, chief economist at ADP. “In short, the labor market is dynamic, but doesn't tip the scales in terms of a Fed rate decision this year.”
The latest employment data is not having much impact on gold prices as the market takes a breather from its four-day rally that pushed prices to within a few dollars of record highs. However, according to some market analysts, the data will provide important support at these elevated levels.
April gold futures last traded at $2,144.20 an ounce, up 0.11% on the day.
While employment continues to cool, the report noted that wages remain fairly elevated. For workers who changed jobs, they saw their annual wages increase 7.6% last month. The report said this was the first wage increase in more than a year.
Meanwhile, workers who stayed in their jobs saw their wages increase 5.1%, the smallest gain since August 2021.
Although employment was slightly weaker than expected, the report did not see any significant job losses. In a sector-by-sector breakdown, goods-producing businesses created 30,000 jobs this month.
Natural resource and mining operations saw 4,000 jobs leave their sector, the construction industry saw job growth of 28,000, and the manufacturing sector created 6,000 new jobs last month.
At the same time, service-providing businesses created 110,000 jobs in February. The trade/transportation/utilities sector created 24,000 jobs, the information and technology sector lost 2,000, 17,000 jobs were created in financial services industries, Professional and business services created 5,000 jobs in February, Education and health services created 11,000 jobs, the hospitality sector created 41,000 new positions and other sectors saw job growth of 14,000.
The latest employment data has not moved the needle on market expectations regarding the Federal Reserve’s monetary policy. Markets see a roughly 70% chance of a rate cut in June.
