Disturbing news from the US labor market

yesterday's ADP private company report concerning employment in the US in the private sector indicated that the situation is far from normalized and surprised negatively. This translated into increased tensions ahead of Friday's government data release on non-farm payrolls.

According to ADP, 374 new jobs were added to the US in August. new jobs. This is only about half of what the market seemed to expect based on earlier surveys among economists. The report stated that the data representing all employees on payrolls in a given company indicate a deterioration in the labor market situation. We observe a decline in the number of newly hired employees after a significant increase in employment in the first half of the year. Despite the slowdown, the number of new jobs is approaching 4 million this year, but 7 million jobs are still short of pre-epidemic levels. The service sector continues to lead the way for growth.

The dollar is losing, gold and silver are gaining 

The dollar seems to be losing ground in reaction to news from the US labor market. Investors began to consider the possibility of postponing taperingand increases interest rates for mid-2023

Precious metals valued in USD, in turn, appeared to be gaining. Gold is nearing $ 1820 and silver is nearing $ 25 an ounce. In an environment of high inflation and a slowdown in job creation, precious metals may be the markets to which capital could flow if such a discrepancy in macroeconomic data continues.

Friday will tell the truth?

The ADP report also puts a strong question mark on whether the official will reach consensus NFP reportwhich will be published on Friday. The market seems to expect a reading above 700. new jobs. However, if there are fewer of them, the more the expectations for tapering and interest rate hikes may be delayed, which may still put pressure on the USD and cause a continuation of loose monetary policy in the United States.