We’ve been made to wait for it, but the September US jobs report didn’t disappoint, with the headline non-farm payrolls figure falling well short of expectations at 148,000. We did see a small upward revision to the August figure, but based on the reaction in the markets, this was no compensation for the poor September figure.
If there was any question about whether the Fed would taper later this month, this has surely put an end to it. Most people had already accepted that it would not happen, but now the earliest date we can possibly be looking at is December. And even that is too early as far as I’m concerned.
One of the most concerning things in all of this is that companies were not confident enough in the economy to hire new staff before the government shutdown and the US almost hit the debt ceiling. Imagine what the figures will be like in October and even November in December, given that crisis was only just averted and the can kicked down the road by only a few months. This does not bode well for the US.
This explains why we saw so much selling of the dollar and buying of Gold immediately following the release. A lack of tapering, which to an extent had previously been priced in, leads to further dollar weakness, something that I expect to continue in the coming months.
Gold, which is seen as a hedge against inflation, also benefitted greatly from the release. The precious metal broke back above $1,300 last week and I see no reason why it can’t reach its previous highs, hit at the end of August, around $1,433 in coming months .
The only real surprise today came around the unemployment rate, which fell despite fewer jobs being added, than expected, and the participation rate remaining at the same level as last month. I expect this to rise in the coming months, with revisions to this month’s figure and companies taking on fewer people, taking its toll.
If there was any question about whether the Fed would taper later this month, this has surely put an end to it. Most people had already accepted that it would not happen, but now the earliest date we can possibly be looking at is December. And even that is too early as far as I’m concerned.
One of the most concerning things in all of this is that companies were not confident enough in the economy to hire new staff before the government shutdown and the US almost hit the debt ceiling. Imagine what the figures will be like in October and even November in December, given that crisis was only just averted and the can kicked down the road by only a few months. This does not bode well for the US.
This explains why we saw so much selling of the dollar and buying of Gold immediately following the release. A lack of tapering, which to an extent had previously been priced in, leads to further dollar weakness, something that I expect to continue in the coming months.
Gold, which is seen as a hedge against inflation, also benefitted greatly from the release. The precious metal broke back above $1,300 last week and I see no reason why it can’t reach its previous highs, hit at the end of August, around $1,433 in coming months .
The only real surprise today came around the unemployment rate, which fell despite fewer jobs being added, than expected, and the participation rate remaining at the same level as last month. I expect this to rise in the coming months, with revisions to this month’s figure and companies taking on fewer people, taking its toll.
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