March’s Non-Farm Payrolls beat expectations coming in at 196,000 while the unemployment rate held steady at 3.8 percent. March’s payroll increased by 4 cents to $27.70 representing a slowdown in wage growth. January and February added 14,000 more jobs than previously reported. The dollar and gold traded in both directions following the report but now sit almost unchanged about an hour following the data.
Jobs Report Recap:
Today’s Non-Farm Payroll figures has been a very anticipated data point. The market has been itching to see if we were able to bounce back from last month’s abysmal miss. Last month just 20,000 jobs were added vs the 180,000 expected. March’s Non-Farm Payrolls printed at 196,000 vs the 177,000 average analyst expectation.
This report was highly anticipated since February’s data was bogged down by very cold weather and the government shutdown. The number of unemployed persons changed very little sitting at 6.2 million. The participation rate came in at 63 percent also having changed very little over the past 12 months. Over the past 12 months the average hourly earnings have increased by 3.2 percent. In February payrolls rose by 10 cents to $27.66 while march came in at 4 cents increasing to $27.70.
Trends in the Jobs Market:
— Bloomberg Economics (@economics) April 5, 2019
This data signals that the labor market is very strong and can support more economic growth in the coming months. Jobs growth has slowed down from last years pace but is still making headway as unemployment is at historic lows. Wage gains have slowed as average hourly earnings increase was just 4 cents compared to 10 cents in February.
Slowing wage gains suggest that the inflation issues may be subdued as the Federal Reserve begins to prepare for the U.S. economy slowing down. The three-month average for jobs gains is down from 191,000 to 180,000 even as January and February’s figures were revised up. January and February added 14,000 more jobs than previously reported.
Gold and Dollar Price Action:
Immediately following the report gold was bid up about $4 while the dollar took a steep leg down. This move quickly reversed as gold sold off about $9 during in the following 15 minutes. 30 minutes following the report we are $2 higher for spot gold than before the report while the dollar is back to where we started. Most analyst were expecting gold to breakout on a weak report as it would imply the economy is starting to slow down.
The better than expected report has traders feeling like the recession is still in the distant future. More negative reports would be catalyst for breakouts in gold. Keep an eye on jobs data as this could be a strong indicator that the strength of our economy is waning. Gold will most likely breakout when we start to see cracks appear in the U.S. economy.