Payrolls number disappoints Wall Street could be the headline for today's trading session. The always volatile number came in at +214K against expectations of a +233K. The rate of unemployment fell to 5.8% versus market expectations of 5.9%.
The numbers for September were adjusted upwards to +256K from +248K. Also, the August numbers were kicked up as well going from +180K to +203K.
As always, the data unleashed a round of furious price action across the currency markets, and by default, the gold market. Most are seeing the numbers as having a bit of something for all sides.
Those reacting to the headline number registered their disappointment by selling the Dollar, especially in favor of the Euro.
However, those who were looking at the monthly average since the beginning of the year, were doing the opposite. Analysts pointed out that the average number of jobs created this year has been +220K/month, something not seen since nearly a decade ago.
A key data point inside the report was the fact that average hourly wages rose 3 cents to $24.57. A lot of traders, including yours truly here, are closely watching that important number. Remember, it is my view that the reason inflationary pressures have yet to show up in the economy is because wages have been flat/stagnant. If, and this is a HUGE "IF", we were to see a trend in rising hourly wages develop, that might be the catalyst that could shift the current deflationary psyche to one more of an inflationary bias. It is certainly not here now but we are all watching.
The data did little to convince market players that the Fed is going to move on the interest rate sooner rather than later. Most still expect something to happen on the front mid year next year. Shortly after the data was released however, one of the Fed governor's, Mr. Mester was quoted as saying that the report was: " a pretty solid jobs report across the Board". He also noted that the "unemployment rate is a pretty good indicator of improvement in the Labor Markets".
The Fed has been very vocal about stating its close scrutiny of the labor markets ahead of today's reports in their various statements coming out of the FOMC meetings.
I am interested in seeing how the dust settles today before making too much of the early price action. As I said, there is a little of something for everyone in this report.
The Dollar moved slightly lower as an initial reaction to the report but in the tmie it has taken me to type these comments, it has since stabilized and remains slightly higher. Gold is taking its cues directly from movements in the Forex markets.
No telling where all this will end today so buckle your seat belts and stay tuned.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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