Gold prices have taken a slight dip this morning in the face of stronger-than-expected jobless claims data. The number of Americans who applied for unemployment benefits last week was 206,000 compared to the forecast 226,000, a near-49 year low.
Key Takeaways
- US jobless claims dropped to 206k with a 4-week moving average of 224,750 vs 228,500 the week before.
- Initial jobless claims are now at a near-49 year low.
- Continuing claims also defied expectations with a reading of 1.661 million vs the 1.649 million expected.
- The largest increases in initial claims were in California, Pennsylvania, New York, Illinois, and Texas.
- The largest decreases were in Oklahoma, Kentucky, Massachusetts, Vermont, and the Virgin Islands.
The week ending December 01 saw 21,061 initial jobs claims open in California, 9,937 in Pennsylvania, 8,652 in New York, 7,915 in Illinois and 7,382 in Texas. Oklahoma data shows a decrease of 813 claims with -764 in Kentucky, -615 in Massachusetts, -293 in Vermont, and -3 in the Virgin Islands.
The data points to a strong labor market which points to a healthy economy overall, something which lends strength to the US dollar in the face of ongoing trade disputes. This outlook is supported by the data from the 4-week moving average which is less volatile than the weekly reports.
Through Oct and Nov initial jobless claims had been pivoting higher off historic lows but that's old news. In data for the Dec 8 week, claims fell a very sharp 27,000 to a much lower-than-expected 206,000 for the best showing since the historic lows of mid-Sept. pic.twitter.com/yqw8mqAaad
— Econoday, Inc. (@Econoday) December 13, 2018
Last week’s decline was the lowest since April 2015 and the reading of 206,000 claims is not far off September’s reading of 202,000 which was the lowest since December 1969. The drop last week lends credence to the theory that the slowdown in jobs growth seen in November was due to a shortage of available workers, with an increase of 155,000 non-farm payroll positions in November compared to a much stronger 237,000 in October.
Federal Reserve officials now view the labor market as being at full-employment with a 3.7% unemployment rate, the lowest in approximately 49 years. Forecasts regarding the monetary policy for 2019 has changed with economists now predicting 2 rate hikes and traders predicting only one.
Market Reaction
Gold is under some modest selling pressure in the face of the labor market data which points to a healthy economy and weakens the use case of gold as a safe haven in the eyes of some traders today.
Spot gold is currently trading at $1,243.03/oz with a 0.11% loss, a high of $1,243.34/oz and a low of $1,242.50/oz.
Gold Price Chart
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