Friday's Non-Farm Payroll jobs report from the US Department of Labor was, to be blunt, bad. We've gotten used to NFP reports that just gloss over the bad news, but even the Bureau of Labor Statistics wasn't able to make up good numbers last week. As for market reaction, the US dollar stayed fairly stable, showing very little movement, despite the bad news.
Let's start with the headline number: There were 142,000 jobs created in September, and the August number, already an anemic 173,000 was revised downward to 136,000. This is not even enough to keep up with population growth, which brings up the question of how, with such weak numbers, did the baseline unemployment rate remain steady at 5.1%?
The answer to that is buried a little further down in the NFP, with the labor force participation rate (the proportion of the population actually counted as looking for work) dropping to a 38 year low of 62.4%. The average job growth in the US for 2015 is 198,000 per month, well below last year's average of 260,000.
There is no way to put lipstick on this pig.
This may be a case of the US being the least sick patient on the ward; Europe is on the brink of recession, China is obviously in the midst of an economic slowdown, Japan is in the third decade of its doldrums, and the emerging market economies are facing a combination of debt, currency, and export crises. In company like that, the US looks good despite its weaknesses. By the numbers, the USD/JPY is up at 120.22, the EUR/USD is also up slightly, at 1.1214. The GBP/USD is down a little from last week, at 1.5160.
Gold and silver, however, reacted predictably to the poor jobs report. Gold rose 2.2% on Friday, to reach $1,138.60 per ounce. It's lost a few cents since then, and is currently at $1,138.48.
Silver had an even better day, rising 5.2% to reach $15.26. It's been on an upswing since then, and is currently trading at $15.59. With its lower cost of purchase and its precious metal status, silver is an obvious choice of safe-haven for investors who may be short of cash. As a precious metal commodity, silver's low cost makes it easier to buy and easier to sell.
The bottom line: look for the dollar markets to remain steady, while the metals continue to show plenty of action.
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