The knee-jerk reaction is a lot of “selling”, but what effects will today’s jobs report have on the markets, gold & silver?
The BLS Jobs Report, formally known as the Employment Situation Report, was just released.
Prior to the release, here were the consensus estimates from Econoday:
Here are the actual numbers as reported by the BLS:
Number of jobs created in the month of May, 2019: 164,000
Unemployment is unchanged at: 3.7%
Average hourly earnings (year over year) rise: 3.2%
Labor force participation rate is unchanged at: 63%
Before we dive into the report, however, let’s look at the set-up.
On Wednesday, the Fed pulled-off what is being referred to in the mainstream as a “hawkish cut”.
That reference is ridiculous because the Fed hasn’t been tight with monetary policy, arguably since 1913, but incontestably so since the 2008 Financial Crisis, so really what happened on Wednesday is the Fed simply became more loose with their increasingly “easy money” practices.
Regardless, the “markets” took the cut as hawkish, and President Trump as not pleased with what the Fed did because the Fed did not devalue the US dollar as much as Trump wanted by means of a deeper cut in interest rates.
….As usual, Powell let us down, but at least he is ending quantitative tightening, which shouldn’t have started in the first place – no inflation. We are winning anyway, but I am certainly not getting much help from the Federal Reserve!
— Donald J. Trump (@realDonaldTrump) July 31, 2019
You see, both President Trump and the “markets” want moar!
More rate cuts!
Stick it to the Deplorables trying to save!
Stick it to the elderly forced to choose between food, medicine and air conditioning!
Viva la market!
On Thursday, the WWE theatrics continued when President Trump applied back-door pressure on the Fed to continue cutting rates.
How did he do this?
Well, he escalated the Trade War of course:
And that Tweet led to “market turmoil” – the dollar plunged as did the stock market and US Treasury yields.
Gold & silver surged after those Tweets.
Which brings us to today and the just-released Jobs Report for July, 2019.
Here’s what the mainstream financial press is saying about the report via Bloomberg (bold added for emphasis):
U.S. employers kept adding workers at a healthy pace in July and wage gains picked up, underlining a solid labor market ahead of this week’s Federal Reserve interest-rate cut and President Donald Trump’s threat to ratchet up tariffs on Chinese goods.
Payrolls rose 164,000, almost matching projections, though the two prior months were revised lower, according to a Labor Department report Friday. The jobless rate held at 3.7%, near a half-century low, while average hourly earnings climbed 3.2% from a year earlier, better than forecast.
Despite July’s healthy payrolls figure, the three-month average increase of 140,000 was the slowest in almost two years. That trend is in line with forecasts for a gradual slowing of job gains as the labor market tightens, but it could also be seen as a sign that the economy is losing steam.
Investors boosted bets on additional reductions after Trump’s latest trade salvo on Thursday. The Federal Reserve had signaled a day earlier that its quarter-point interest-rate cut would likely start only a short round of monetary easing, though Chairman Jerome Powell indicated that the central bank was watching trade developments closely.
Revisions subtracted 41,000 jobs from the prior two months. The June figure was lowered from 224,000 to a less-eye-popping 193,000.
Here’s a look at the Jobs Report, graphically, from ZH.
As you can see, this is a fairly bland report.
On the surface, it seems mediocre – it’s not to bad and it’s not too great, which is exactly where the cartel wants the report.
Well, if the Fed was quick to scapegoat a weakening global economy, to say that inflation that’s just too dang low, and indicate that escalating trade war tensions are all the reason for cutting rates, this Jobs Report doesn’t really matter.
In other words, this is a pretty neutral jobs report, and it allows the cartel to work on reprogramming the algos and to begin the execution stage of their plan to bring economic misery and financial ruin to America, timed to the 2020 election, all without having some unexpected report-data-release-sensitive bugs or glitches exposed in their live-testing because the report is neutral.
In a live environment that’s neutral, it is easier to make sweeping changes to market dynamics and appear to be somewhat in control of it all.
Well, let me say i differently: Why would the cartel sandbox their digital market-rigging computer-programming tweaks when it’s so much more fun to just whip up a bunch of free money, off-books and unaccounted for, to make all of the testing not something virtual or simulated, but a live test that brings with it the possibility to score some sweet fiat in the process of the testing?
Lifestyles of the evil and corrupt are expensive, you know?
And they also love playing their games!
Move on to gold & silver.
As per usual, the “sell” button was smashed the minute the report hit the tape:
That’s a pretty impressive gyration in silver.
It appears the knee-jerk reaction is selling indeed pressure:
Knee-jerk reactions are usually not the eventual direction of the actual move, and knee-jerks last a while.
To me, this report doesn’t really do anything one-way or another for the markets – it’s market neutral.
It’ll be interesting to see if the next headline number comes in lower, and so on, and so forth.
If the report is good news, bad news, or neutral, it’s always smashin’ time for the cartel.
In my opinion, the cartel’s just going to naked-short the crap out of gold & silver.
But this will not last much longer because gold & silver are real things.
And to get something real, when those things are in strong hands?
That’ll take real money, despite what the paper price says.
I think weakness here is short lived, especially silver.
You see, we’ve really had inflation all this time.
And $50 for an ounce of silver is nothing.
I think we’re going to blow through it.
The unknown is physical supply?
For now, there is plenty.
So they will smash.
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.