At 21:30 Beijing time on Friday, the U.S. non-farm payrolls report for November was released as scheduled. According to the data, the new non-farm payrolls recorded 245,000 in November, the previous value was 638,000, and the market expected 469,000. At the same time, the U.S. unemployment rate in November was recorded at 6.7%, with the previous value and market expectation at 6.9% and 6.8% respectively.
It is worth mentioning that this is the fifth consecutive month of declining growth in new nonfarm payrolls, while the unemployment rate fell for the seventh consecutive month, and hit a new low since March.
After the data was released, spot gold rose $7 in the short term and fell back quickly, or more than $14, now at $1838.34/oz; the dollar index fell 11 points in the short term, the dollar against the yen, the dollar against the Canadian dollar are lower in the short term; U.S. stock index futures rose in the short term, the Dow futures rose 0.5%, S&P 500 index futures rose 0.38%, Nasdaq futures rose 0.31%; U.S. 10-year Treasury yields rose to 0.9228%.
Non-Farm Payrolls Data Far from Expected Reveals U.S. Economic Woes
A number of institutions have also given their views on the significantly lower than expected non-farm payrolls data.
Reuters Commentary notes that this closely watched jobs report only covers the first two weeks of November, when the current wave of the epidemic began. As more and more jurisdictions impose restrictions on businesses and consumers avoid crowded establishments such as restaurants, the number of new jobs will continue to fall in December or January.
CNBC noted that new nonfarm payrolls were much lower than market expectations because the increase in new coronavirus infections coincided with a significant slowdown in hiring activity. While the U.S. is experiencing its fastest quarterly growth on record, economists fear that the next couple of quarters could see flat or even negative growth before a strong rebound in the second half of 2021.
With the epidemic spreading at an unprecedented pace and impacting U.S. economic activity and growth, the report shows the impact of restrictions at all levels of the U.S. government on the economy and job market, according to market analyst Patti Domm.
The non-farm payrolls report, which missed expectations, also showed the unevenness of the U.S. economy, while still giving the market some hope.
The U.S. Bureau of Labor Statistics stated that in November, there were significant job gains in transportation and warehousing, professional and business services, and health care. This suggests that the U.S. economy is not going through the toughest of times.
In addition, excellent manufacturing and services PMI data showed that the U.S. saw its strongest new order inflow in nearly a decade, which is an important support for the job market.
According to the data, the U.S. manufacturing PMI averaged 55.8 over the past six months, the highest level in nearly two years, demonstrating the resilience of the U.S. economy. As of November, the U.S. services PMI has achieved six consecutive months of growth, and the six-month average is also at the highest level in the past two years.
It should be noted that manufacturing output accounts for about 15% of U.S. economic activity and is one of the most important economic pillars of the United States.
Looking ahead to economic conditions at the end of the year, the Atlanta Fed in its forecasting model indicates that the U.S. GDP could grow at an annualized rate of 11.1% in the fourth quarter. Some economists predict that if the U.S. economy can keep up with this level of expansion, then businesses will resume hiring at a much faster pace as vaccines become available and outbreaks are brought under control.
How do you explain the bizarre market?
In a market that did not match expectations after the release of the non-farm payrolls, the financial website ActionForex believes that investors’ recent focus has been on optimistic information related to vaccines, while ignoring the current outbreak of the disease and the related blockade, so the market’s reaction to Friday’s non-farm payrolls report was limited.
In other words, market sentiment is still dominated by the progress of vaccine development and investors need to pay close attention to this development.
From a vaccine perspective, Wells Fargo’s analysis suggests that the coming months will be critical to the job market’s recovery. With several new coronavirus vaccines now in development, economic life may begin to return to normal next summer. However, with the U.S. in the midst of the holiday season, new cases of new coronavirus will be at their peak, and many states are imposing new restrictions on private activity, the next few months could be particularly difficult.
From the short term volatility of the gold market, it is clear that market sentiment is still very complex and investors need to be wary of further amplification of market volatility.
Some analysts reminded investors that, in addition to the short-term volatility caused by non-farm payrolls, the price of gold is still mainly affected by vaccines and the dollar exchange rate. According to the financial website Fxstreet, today the market generally believes in two expectations.
New economic embargo measures will again slow U.S. economic recovery
The Fed is likely to expand its bond-buying program in December, injecting more liquidity into the market.
If the above expectations become reality, funds will flow into the gold market significantly, thus pushing up the price of gold.
As for the U.S. dollar, the non-farm payrolls are a major negative.
Recently, the U.S. index has been struggling in the downward interval, and now that the non-farm payrolls have not brought good news, a huge army of short-sellers is afraid to launch a general offensive again. It should be noted that, from the daily chart, only 90.7, an important support level, is left for the US index to break the 90 mark, which is the key point that investors need to pay close attention to in the near future.
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