(Kitco News) - The gold market is holding on to gains Wednesday morning but could struggle to attract new bullish momentum as the U.S. labor market continues to fire on all cylinders, according to private sector payrolls processor ADP.
Wednesday, ADP said that 184,000 jobs were created last month. The report beat expectations as consensus forecasts called for job gains of 148,000.
The nation’s private sector labor market is seeing its best employment gains since August 2023.
However, the gold market is not seeing much reaction to the latest employment data. June gold futures last traded at $2,290.50 an ounce, up 0.38% on the day.
Along with robust gains in headline employment, the report also noted that wages saw solid gains last month, adding further concerns to the ongoing inflation threat.
“March was surprising not just for the pay gains, but the sectors that recorded them. The three biggest increases for job-changers were in construction, financial services, and manufacturing,” said Nela Richardson, chief economist, ADP, in the report. “Inflation has been cooling, but our data shows pay is heating up in both goods and services.”
Looking at wages, the report said that for workers who stayed in their jobs, their paychecks increased by 5.1%, the first increase after months of steady deceleration. Meanwhile, people who changed jobs saw their wages increase 10%, the second consecutive increase.
The report noted broad-based gains in all major sectors of the economy. In manufacturing, the construction sector saw job growth of 33,000. Meanwhile in the service sectors, leisure and hospitality saw job growth of 63,000.
The only sector of the economy to see losses was in professional and business services, which reported a decline of 8,000 jobs.
According to some economists, this employment report could put some pressure on the Federal Reserve and delay its much-anticipated easing cycle. Tuesday, some members of the monetary policy committee already started pushing back on the idea of three rate cuts this year.
Tuesday, San Francisco Federal Reserve President and FOMC member Mary Daly said that she feels no urgency to lower interest rates and added that three rate cuts were “a projection, not a promise.”
