February small non-farm payrolls burst into flames, but gold and silver bulls are the first to flee?

At 21:15 Beijing Time on Wednesday, the U.S. small non-farm payrolls data was released, recording an increase of 117,000, lower than the expected 177,000, with the previous value revised upward to 195,000.

After the ADP data was released, spot Gold fell below $1710/oz, a daily drop of 1.63%; at the same time, spot silver also suffered a sell-off, down more than 2%. The U.S. gold sector sank briefly in the pre-market, with Kinross Gold down nearly 3% and Harmony Gold down more than 2%. U.S. stock futures sank, with the Nasdaq futures turning lower, after once rising more than 1%.

It is worth noting that before the data was released, gold and silver saw a wave of apparently sharp setbacks, the gold market surprised the smash, COMEX most active gold futures contract at 21:09 GMT a two-minute volume of 2,688 lots, the total value of trading contracts over $460 million.

The job market is slowly recovering and the service sector will lead the way?

Here is a look at the breakdown of employment by industry in February.

Financial services employment was unchanged, having increased by 0.1 million in January.
Manufacturing employment decreased by 14,000, compared to an increase of 0.1 million in the previous month.
Employment in construction decreased by 0.3 million, compared with an increase of 18,000 in the previous month
Employment in trade/transportation/utilities increased by 48,000, compared with an increase of 16,000 in the previous month.
Business services employment increased by 22,000, compared with an increase of 40,000 in the previous month.

ADP Chief Economist Nela Richardson pointed out that the job market continues to recover slowly across the board, and we are seeing large companies increasingly feeling the effects of the new crown Epidemic, with job growth in the goods-producing industries stagnating. With the epidemic still dominating, the service sector remains well below pre-epidemic levels; however, this sector will likely be the biggest beneficiary as opening times approach and consumer confidence increases.

What is the real U.S. economic picture?

Looking at recent economic data, the U.S. economy is poised for a strong recovery in 2021, and with the stimulus bill about to drive a new round of cash inflows, the U.S. economy will grow faster than the most optimistic expectations in the first quarter.

Monday’s U.S. manufacturing data showed that the sector is at its highest level of growth since August 2018. The U.S. ISM manufacturing index, released the same day, also expanded at its largest pace in about three years in February, confirming one view among economists – that U.S. output began the year much better than many had predicted in late 2020, when output was expected to remain only in the low single digits.

The Atlanta Fed tracks data in real time through its GDPNow tool to estimate changes in U.S. GDP, which the institution now expects to grow by 10 percent in the first three months of the year.

This comes after a report released on Friday showed that U.S. personal income soared 10 percent in January, thanks in large part to $600 per person in stimulus money from the government. Household wealth increased by nearly $2 trillion during the month, while spending rose by just 2.4 percent, or $349 billion.

These figures, combined with a surge of nearly $4 trillion in savings, suggest that the U.S. economy is not only growing strongly, but is expected to continue that momentum this year.

Ed Yardeni of Yardeni Research wrote in his daily briefing on Tuesday that real GDP will remain in a V-shaped recovery through the first half of the year and even into the end of the year. After that, GDP will be in a record expansion range.

However, there are still corners of the economy that are “too cold,” as evidenced by today’s ADP data, the most important of which is the employment gap, especially in the service sector.

According to the U.S. Bureau of Labor Statistics, as of January, the number of jobs was 8.6 million less than a year ago before the epidemic began to threaten the United States. About 4.3 million Americans left the labor force during this period.

While the overall unemployment rate fell to 6.3 percent from the epidemic’s high of 14.8 percent, employment in the hospitality industry fell by more than 3.8 million from a year ago, with the industry’s unemployment rate at a high of 15.9 percent.

In terms of shortfall, there are still nearly 10 million jobs missing from the labor market.

In addition, Joseph Brusuelas, chief economist at RSM International, said he doesn’t think the pent-up demand will be fully released this year, which is expected to take about two years.

For more on the current state of U.S. employment, we can look for more clues from the non-farm payrolls report to be released on Friday.