Morning Snapshot: Gold Edges Up Within Range Following NFP Miss

USAGOLD/Peter Grant/11-03-17

Gold is up slightly this morning, nonplussed by the NFP miss and still locked within the recent range. The dollar index remains narrowly confined as well near its 3-month highs, which is helping to limit the upside for the yellow metal. Silver is up as well, maintaining recent gains above $17.00.

U.S. nonfarm payrolls rose 261k in October, below expectations of +318k and whispers in the neighborhood of +400k. As I said in commentary yesterday, forecasters set a pretty high bar, creating the risk for disappointment. September NFP was revised higher from -33k to +18k, so at least the negative print is off the books. The unemployment rate ticked down to 4.065%.

So after a terrible number in September and a smaller than expected post-Hurricane rebound in October, how is it that the jobless rate ticked lower? Zerohedge explains:

…the number of people who exited the labor force soared by a near record 968,000 in October – the third highest on record – pushing the total number of people not in the labor force to a record 95.385 million, as the civilian labor force shrunk by whopping 765,000 in one month. — Zerohedge

Average hourly earnings came in unchanged for October, below expectations of +0.2%. The annualized rate of wage growth slowed to 2.4%.

Some are claiming this should be attributed to hurricane disruptions, but the chart presented by Bloomberg suggests that wage growth was meeting resistance ahead of 3% long before this hurricane season. This is something the Fed is likely to be watching very closely going into year-end, because if already tepid wage growth has stalled, it does not bode well for the inflation pressures that Fed keeps contending are just around the corner.

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