Gold prices holding above $2000 as U.S. economy created 145K private-sector jobs in March, says ADP
(Kitco News) – Gold prices are holding their breakout gains above $2,000. Still, they are not seeing a lot of new momentum following weaker-than-expected growth in the U.S. private-sector labor market, according to private-payrolls processor ADP.
Wednesday, ADP said that 145,000 jobs were created last month. The data significantly missed expectations as Economists were looking for job gains of around 208,000.
The gold market is holding steady, with June gold futures last trading at $2,045.50 an ounce..
According to some analysts, the latest employment data will add to growing speculation that the Federal Reserve is done raising interest rates, despite some hawkish rhetoric from the central bank.
The CME Fed WatchTool shows that markets see a 50/50 chance that the Federal Reserve will leave interest rates unchanged at 5.00% in May.
Although the U.S. economy continues to create jobs, there were declines in two major sectors. The report said 30,000 manufacturing jobs were lost in March in the broad goods-producing sector. The natural resource/mining sector created 47,000 jobs and 53,000 jobs were created in the construction sector.
Meanwhile, in the service sector, the report noted that professional/business services saw job losses of 46,000. The Financial industry lost 51,000 jobs last month. Trade/transportation and utilities created 56,000 jobs last month; the IT sector lost 7,000 jobs; 17,000 jobs were created in the education and health services sectors. The hospitality sector continues to see strong growth, with 98,000 jobs created.
Along with weaker-than-expected job growth, the report noted that wages are starting to decline, which for some, is an indication that inflation is cooling. The report said that year-over-year wage gains fell to 6.9%, down from the three-month plateau at 7.2%.
For workers who changed jobs, wage growth was 14.2%, down from February’s increase of 14.4%.
The ADP report will be the only chance markets will have to react to monthly employment data. Markets will be closed Friday for the Easter long weekend as the U.S. government releases its nonfarm payrolls report.
India's economy likely gained pace in March quarter – Financial Post
NEW DELHI — India is set to release data on Wednesday that is expected to show the economy grew by 5% in the January-March quarter from a year earlier, accelerating from 4.4% in the previous quarter due to steady urban demand and government spending.
The median forecast from a Reuters poll of economists hinged on the robust performance of services like travel and retail, and the boost given to demand by falling food prices and the drop in oil prices globally.
Moving forward, India could be at the mercy of a potential global slowdown.
“Slowing global growth, protracted geopolitical tensions and a possible upsurge in financial market volatility” could pose downside risks to the economic growth, Reserve Bank of India, the central bank, warned in its annual report on Tuesday.
The last official estimate for the full 2022/23 fiscal year put growth at 7%, though that could be revised when the GDP data is released on Wednesday at 1200 GMT. Some private economists reckoned growth in the year to March 31 could turn out around 6.8%.
During the March quarter, high frequency indicators showed that a rise in urban incomes had boosted sales of expensive cars, Apple mobile phones, and air travel.
The performance looks less impressive considering that the economy was still working through the tail-end of the pandemic during the previous year.
Farm and manufacturing workers suffered flat growth in real wages due to high inflation, and that kept sales of motorbikes, low-end consumer goods and railway traffic below pre-pandemic levels.
Prime Minister Narendra Modi remains widely popular after nine years in power, but his Bharatiya Janata Party lost assembly elections in the southern state of Karnataka this month as the opposition Congress party promised to step up subsidies for households hit by inflation and unemployment.
Modi must call for a national election by early 2024, and there a several more state polls due before then.
Lack of good paying jobs remains a major issue among the youth as reflected in unemployment rate rising to 8.11% in April and more workers joining the workforce, according to Mumbai-based think tank Centre for Monitoring Indian Economy.
(Reporting by Manoj Kumar; Editing by Simon Cameron-Moore)
Canada's economy grew by more than expected in first quarter, upping odds of rate hike next week – CBC.ca
The Canadian economy grew at an annualized rate of 3.1 per cent in the first quarter of 2023, Statistics Canada reported Wednesday.
The latest data shows growth beat out the federal agency’s own forecast of 2.5 per cent for the quarter. A preliminary estimate suggests the economy grew by 0.2 per cent in April, after remaining flat in March.
The ongoing resilience in the economy will likely spur discussions of a potential rate hike, as the Bank of Canada is expected to make its next interest rate announcement next week.
The relatively strong GDP showing had investors increasing the odds of a rate hike when the central bank meets next week. Prior to the GDP numbers, trading in investments known as swaps was implying a litle over a one-in-four chance of a hike.
Now, those odds are better than one-in-three.
Statscan says growth in exports and household spending helped spur growth in the first quarter. On the other side of the ledger, slower inventory accumulations as well as declines in household investment and business investment in machinery and equipment weighed on growth.
Tuan Nguyen, an economist with consulting firm RSM Canada, says the GDP numbers “blew past expectations.”
“After a slow final quarter of last year, the Canadian consumers and businesses came out strong in the first quarter, defying rising recession concerns that most market participants have been talking about,” Nguyen said. “There is no doubt that the data pointed to a hot economy, explaining why underlying inflation has remained elevated.”
Stubbornly high inflation
The Canadian economy has managed to continue outperforming expectations, despite the Bank of Canada hoping high interest rates would cause a more profound pullback by consumers and businesses.
The household spending figures show spending up on both goods and services in the first three months of the year, after minimal growth in the previous two quarters.
However, the report notes disposable income fell for the first time since the fourth quarter of 2021. The federal agency says disposable income declined by one per cent, largely due to the expiration of government measures aimed at helping people cope with inflation.
The central bank paused its rate-hiking cycle earlier this year, keeping its key interest rate at 4.5 per cent — the highest it’s been since 2007.
But the central bank’s governor, Tiff Macklem, has signalled that the bank is still trying to figure out if interest rates are high enough to quash inflation.
The headline inflation rate ticked up slightly to 4.4 per cent in April, remaining well above the central bank’s two per cent target.
What the JOLTS Report tells us about the economy – Yahoo Canada Finance
The Canadian Press
National Bank reports Q2 profit down from year ago, raises quarterly dividend
MONTREAL — National Bank of Canada raised its quarterly dividend and reported its second-quarter profit fell compared with a year ago as it faced higher non-interest expenses and increased provisions for bad loans. The Montreal-based bank said Wednesday it will now pay a quarterly dividend of $1.02 per share, up from 97 cents. The increased payment to shareholders came as National Bank reported a profit of $847 million or $2.38 per diluted share for the quarter ended April 30, down from a profit
Elon Musk Warns Homeowners About the Value of Their Homes – TheStreet
Five former employees allege Edmonton construction firm ignored sexual misconduct in 'poisoned' workplace – CBC.ca
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