The March BLS Jobs Report was a huge dissapointment, and gold and silver are rising in price after the initial knee-jerk reaction. Here’s more…
Moments ago the Bureau of
Lies Labor Statistics, the BLS, released their March 2018 Non-farm Payrolls, otherwise known as the jobs report.
Here is a snapshot from Econoday of what the ‘experts’ were expecting prior to the release:
Even President Trump is getting in on a little pre-game action this morning:
Despite the Aluminum Tariffs, Aluminum prices are DOWN 4%. People are surprised, I’m not! Lots of money coming into U.S. coffers and Jobs, Jobs, Jobs!
— Donald J. Trump (@realDonaldTrump) April 6, 2018
Which is a follow up to his cheer-leading from yesterday:
Thanks to our historic TAX CUTS, America is open for business, and millions of American workers are seeing more take-home pay through higher wages, salaries and bonuses! pic.twitter.com/0u3dpLJiV2
— Donald J. Trump (@realDonaldTrump) April 5, 2018
Disappointingly, the nation created a total of 103,000 jobs in the month of March, well below even the lowest of expectations:
President Trump will surely be disappointed with this headline number.
Pressure was already applied to gold & silver throughout the night and especially at 3:29 a.m. EST:
Fifteen minutes post-jobs report, and we are still in the knee-jerk phase.
Recall that initially, there can be reactions and wild swings in either direction or in both directions.
It take a moment for the fingers at the ready to decide how many contracts they have to feed into the gold & silver “markets” to keep price suppressed.
The bottom line is this: If the jobs number is a huge miss, then apparently everything is not as awesome as it seems with the economy. This helps give the Fed an “out” to hold rates steady through June, because it is a low enough number of jobs created to create some doubt as far as how well the economy is doing.
Said differently, this jobs report is only one data point, but it is an important one, because it lays the foundation for other lousy data points to come in, and this gives the Fed reason to pause all the way until September.
Ultimately, this would be good for gold, even in the eyes of the mainstream, but they will never admit that so they’ll just ignore it.
Why is it good for gold? Because they have everybody convinced that rate hikes are bad for gold, so if rate hikes can be put on hold, and the data is now just starting to come out to gradually introduce that narrative, then the flip side would be that a pause is good for gold.
But why specifically?
When it comes to not hiking the real interest rate is already negative, meaning the amount of fiat currency people earn on their interest bearing accounts is less than the stated inflation (which is understated anyway), so the argument goes like this: Gold doesn’t pay any interest, but keeping up with inflation is better than negative interest rates.
So not hiking is good for gold.
Actually, hiking is good for gold too, as we have seen with gold’s impressive rise in price since bottoming in December of 2015, precisely when the Fed started their latest ‘rate hiking cycle’.
So how do you know that precious metals price suppression is real?
Because no matter what, the fundamentals are good for gold (and silver), so for something to be going down in price when every indicatior says it’s should be going up in price, then it must be going down for un-natural reasons – a la market manipulation.
But back to the Jobs Report.
The excuses are coming out in order to take hold of the narrative, and now, it seems, courtesy of Zero Hedge that blaming it on the weather is back en vogue:
There was a reason for the miss however: as Goldman warned yesterday, inclement weather kept many away from their jobs; in fact, according to the BLS 159K Americans were unable to work due to weather.
Here is some additional information about the March Jobs Report from the same article:
Going into today’s payroll number, the whisper number was for a substantial miss because as Deutsche Bank noted this morning,” consensus estimate has overestimated the initial March nonfarm payrolls print in four of the last five years by an average of 62k.” Well, that almost exactly how much the consensus estimate of 185K was missed by, because in March, the BLS reported that only 103K jobs were added, a 3 sigma miss to consensus, and roughly 66% drop from February’s upward revised 320K.
The print, as noted, was a 3-sigma miss to consensus.
However, while few the payrolls number may have been a miss following some major prior revisions (January was revised down from +239,000 to +176,000, February was revised up from +313,000 to +326,000, for a net 50,000 fewer jobs than previously reported), what markets really cared about was the hourly earnings, which at 0.3% M/M and 2.7% came precisely in line as expected, and above the 0.1% and 2.6% in February, respectively.
There was some disappointment in the unemployment rate, which remained unchanged at 4.1%, missing expectations of a drop to 4.0%.
Some more details from the report:
Total nonfarm payroll employment edged up by 103,000 in March, following a large gain in February (+326,000). In March, employment grew in manufacturing, health care, and mining.
The change in total nonfarm payroll employment for January was revised down from +239,000 to +176,000, and the change for February was revised up from +313,000 to +326,000. With these revisions, employment gains in January and February combined were 50,000 less than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 202,000 over the last 3 months.
- In March, employment in manufacturing rose by 22,000, with all of the gain in the durable goods component. Employment in fabricated metal products increased over the month (+9,000). Over the year, manufacturing has added 232,000 jobs; the durable goods component accounted for about three-fourths of the jobs added.
- In March, health care added 22,000 jobs, about in line with its average monthly gain over the prior 12 months. Employment continued to trend up over the month in ambulatory health care services (+16,000) and hospitals (+10,000).
- Employment in mining increased by 9,000 in March, with gains occurring in support activities for mining (+6,000) and in oil and gas extraction (+2,000). Mining employment has risen by 78,000 since a recent low in October 2016.
- Employment in professional and business services continued to trend up in March (+33,000) and has risen by 502,000 over the year.
- Retail trade employment changed little in March (-4,000), after increasing by 47,000 in February. In March, employment declined by 13,000 in general merchandise stores, offsetting a gain of the same size in February. Over the year, employment in retail trade has shown little net change.
- In March, employment in construction also changed little (-15,000), following a large gain in February (+65,000).
- Employment changed little over the month in other major industries, including wholesale trade, transportation and warehousing, information, financial activities, leisure and hospitality, and government.
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in March. In manufacturing, the workweek edged down by 0.1 hour to 40.9 hours; overtime edged down by 0.1 hour to 3.6 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.7 hours.
And last, but certainly not least, the average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to $26.82. Over the year, average hourly earnings have increased by 71 cents, or 2.7 percent. Average hourly earnings for private-sector production and nonsupervisory employees increased by 4 cents to $22.42 in March.
Over thirty minutes in, but still in pre-market action, gold and silver seem to be stepping up to their roles on what a bad jobs print means about the economy and the course of the Fed:
Also over thirty minutes in, the dollar is not liking the March Jobs Report:
This afternoon we’ll go over all of the market action in the SD Friday Wrap.
Finally, if the markets don’t move in the manner that is approved by the market manipulators, Fed Head Jerome Powell is on deck to sweet talk the markets at 1:30 p.m. EST. Here’s a link to the live stream from the Economic Club of Chicago on YouTube if anybody is so inclined to get their fill of Fedspeak as we wind down this first week of April.
– Half Dollar
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.