(Kitco News) – The gold market is seeing a modest push higher as the U.S. economy lost 701,000 jobs in March, according to the Bureau of Labor Statistics.
The data was a lot worse than expected as economists were expecting to see the economy shed 100,000 jobs.
Meanwhile, the unemployment rate came in at 4.4%, compared to February’s level at 3.5%; consensus forecasts were calling for a reading at 3.8%.
There is some mixed sentiment in the marketplace following the weaker than expected data. The gold market is steady to modestly higher on the day following the weak employment report. June gold futures last traded at $1,644.20 an ounce, up 0.42% on the day.
While the U.S. economy is starting to lose jobs, wages picked up in March. The report said that average hourly wages increased by 11 cents or 0.4% to $28.62. Wages are up 3.1% for the year.
The monthly nonfarm payrolls report is traditionally highly anticipated and a critical gauge for the health of the U.S economy; however, many economists were dismissing the data ahead of the release saying that it wouldn’t capture the full extent of the weakness in the labor market.
“We do not expect that acute stress to be reflected in the employment report released on Friday,” said economists at Nomura ahead of Friday’s numbers. “The March employment report is likely to be a poor preview of what lies ahead.”
Thursday, weekly jobless claims showed that 6.6 million people applied for unemployment insurance last week. The record number of claims doubled the previous week’s level of 3.3 million. The U.S. economy has come to a screeching halt as states and cities initiate lockdown measures, asking people to stay home to slow the spread of COVID-19.
Most economists have said that they are waiting for April’s employment report to see how the spreading coronavirus has impacted the U.S. economy and labor market.
“The April report will be far worse,” said Adam Button, managing director at Forexlive.com
Andrew Grantham, senior economist at CIBC, also said that he expects the worst is still to come.
“Given the scale of job losses implied by those weekly claims figures, the unemployment rate will likely move above 10% in short order in Q2,” he said.
Along with the disappointing headline data, the report also highlighted downward revision at the start of the year. The bureau said that January’s employment numbers were revised down 59,000 to +214,000 from +273,000. Meanwhile, February was revised up by 2,000 to +275,000 from +273,000.
