(Kitco News) - The U.S. labor market remains relatively robust, as the private sector created significantly more jobs than expected this past month, according to private payrolls processor ADP.
ADP reported that 104,000 jobs were created in July, significantly beating expectations. Consensus forecasts had projected job gains of 77,000.
At the same time, June’s employment data was revised higher, showing a job loss of 23,000 positions—an improvement from the initial estimate of a decline of 33,000 jobs.
“Our hiring and pay data are broadly indicative of a healthy economy,” said Dr. Nela Richardson, chief economist at ADP. “Employers have grown more optimistic that consumers, the backbone of the economy, will remain resilient.”
The gold market is holding support above $3,300 an ounce and is not seeing much reaction to the solid employment data. Spot gold last traded at $3,327.30 an ounce, roughly unchanged on the day.
The report also noted that wage growth remained relatively stable in July. Workers who stayed in their jobs saw their wages increase by 4.4%. Meanwhile, workers who changed jobs in July saw wages increase by 7%.
Analysts have warned investors that gold prices could struggle in the face of healthy employment data, as it remains a critical component of the Federal Reserve’s monetary policy stance.
The U.S. central bank has said it is in no hurry to raise interest rates, as the labor market remains relatively stable and inflation risks remain elevated.
“These are solid numbers and just reinforce what has already been shown by jobless claims and the NFP report: the U.S. labor market remains resilient with little sign of weakness,” said Giuseppe Dellamotta, Market Analyst at Forexlive.com.
Some economists have said the labor market could see renewed momentum as fears over President Donald Trump’s trade war begin to ease. The U.S. has managed to strike trade deals with Japan and the European Union that would see import costs rise by 15%.
Although the higher tariffs could drive inflation higher, some economists note that corporations will welcome some economic stability.
