GMT+8 At 20:30 on Friday (October 8), the September non-agricultural employment report in the United States was released, and its performance was significantly lower than expected, which made it more difficult for the Fed to pursue its policy orientation. As of press time, spot gold jumped 13 US dollars to 1,775.31 US dollars per ounce.
Specific data show that the United States added 194,400 non-agricultural employment population in September, far less than the expected increase of 500,000. The previous value was revised from an increase of 235,000 to an increase of 366,000; the US unemployment rate in September fell by 0.4 percentage points from the previous value. To 4.80%, it was also significantly lower than the expected 5.10%.
Non-agricultural data in September showed that the lack of employment willingness of the American people has led to sluggish employment growth that has not been reversed, although most federal unemployment subsidies have ended that month. As a result, on the one hand, employment growth has been slow, and on the other hand, labor shortages have further increased wage inflation.
Investors questioned the health of the economy and made U.S. Treasury yields lower in the near term. The policy orientation of the Fed after the Fed is even more in a dilemma, leading the market to raise bets on the Fed to postpone or slow down the pace of downsizing.
Financial website Forexlive commented on September non-agricultural: employment growth in September brought the overall employment level back to the level of February 2020 (before the epidemic). However, the employment rate (that is, the employment ratio of people aged 15 and over) in September was 60.9%, 0.9 percentage points lower than in February 2020, because the population has grown by 1.4% in the past 19 months.
Economic slowdown in the third quarter
A survey released by the Conference Board last week showed that consumers have softened their views on the current state of the job market. The ISM manufacturing employment index rebounded last month, but the service industry employment index fell.
The Atlanta Fed estimates that the economy will slow down to an annual growth rate of 1.3% in the July-September quarter. The second quarter was an increase of 6.7%. The economy decelerated in the third quarter, partly due to the surge in new crown cases in the summer, the weakening of the government's relief funds for the epidemic, and the shortage of raw materials, which hit car sales.
However, the September non-agricultural report suggested that the significant slowdown in economic activity in the third quarter may be only a temporary phenomenon. The September ADP Private Employment Report released earlier this week showed that private employment grew stronger than expected last month. Between mid-August and mid-September, the number of unemployed persons in the United States declined;
As the peak of the new coronavirus infection in the summer began to fade, it promoted the demand for high-contact services such as dining out, and also allowed the Fed to start reducing the scale of monthly debt purchases. The September non-agricultural employment data is the only employment report available before the Fed's policy meeting on November 2-3. The Fed hinted last month that it may start to reduce the scale of monthly debt purchases as early as November.
Labor shortage and shortage remain
The labor market and the overall economy are still subject to labor shortages caused by the epidemic. As of the end of July, the number of vacancies in the United States reached a record 10.9 million, setting a record high for the fifth consecutive month, demonstrating further imbalances in the US labor market.
In a report entitled "Major Attrition," McKinsey, a management consulting firm, pointed out that the number of employees who are about to resign or are considering resigning has reached a new high. Since April this year, more than 15 million American workers have left their jobs.
James Knightley, chief international economist at ING in New York, said: "The spread of the new crown epidemic is beginning to weaken again... But the job market is still clearly tight, and the labor supply is still very limited."
Companies and Republicans blame the expanded welfare measures as the cause of labor shortages. These welfare measures provide unemployment checks for people who are not eligible for regular unemployment benefits. The welfare measures provided by the federal government expired in early September, and more than 6 million people were affected.
However, many unemployed people seem to have saved part of their aid, so they are not in a hurry to start looking for work. Some analysts said that benefiting from the strong stock market and record-setting rise in house prices and the surge in household wealth, a large number of people chose to withdraw from the labor market early.
The labor shortage in the United States is affecting many industries. Whether it’s blue-collar or white-collar jobs, companies say that it is difficult to recruit suitable employees now, the recruitment cycle is longer, and job seekers require higher salaries, which brings greater production efficiency and management costs to the company Challenge.
The Organization for Economic Co-operation and Development (OECD) said last month: “Only when wage inflation rises sharply will there be a sustained rise in inflation caused by low interest rates before the epidemic.” The OECD believes that overall wage pressures are still moderate. But it did note that wages in areas such as the recently reopened "contact-intensive" industries such as the US leisure and hotel industry have risen sharply.
The Senate avoids defaulting on debt, but the challenge is greater
The U.S. Senate on Thursday (October 8) took a step toward passing the move to increase the $480 billion borrowing authority for the Treasury Department, and the bill will be passed to the House of Representatives for final approval. If it is finally passed, it will be enough to maintain the borrowing and expenditure of the Ministry of Finance until at least the beginning of December. Investors believe that the risk of default has been eased, which will help eliminate the Fed's constraints on starting to cut debt purchases during the year.
After the debt limit was raised to 28.9 trillion U.S. dollars, the newly added 480 billion U.S. dollars is expected to be used up by December 3. According to an expedient plan passed after another party confrontation earlier this month, most federal projects The grant will also expire on this day.
But in the next eight weeks, the heavily divided Congress will face a double challenge: on the one hand, reaching a compromise on federal government agency spending before September 2022 (involving education and foreign aid programs to immigration enforcement and airport security), and on the other It is also necessary to avoid breaking the debt limit again.
U.S. Treasury Secretary Yellen said in an interview with CNN on Thursday that she is pleased to see that the Senate is taking action to suspend the debt ceiling, but she added that the implementation of the debt ceiling is causing more and more damage to the United States. The dangerous conflict has caused the American people and the global market to question whether the United States is paying its bills seriously."
The months-long stalemate in the negotiations put the United States on the verge of defaulting on its debt, and the Treasury Department predicted that by October 18 it would no longer be able to fulfill its debt service obligations. A default in the United States may cause turbulence in the global financial system and cause millions of people to lose their jobs.
Look at $1727 under spot gold
On the daily chart, the price of gold has started a three-wave downward trend from US$1770. The support below looks to the 23.6% target of US$1744 and the 38.2% target of US$1727. Wave 3 is a sub-wave of the downward (3) wave that started at $1834. (3) Wave is a sub-wave of the downward ((Y)) wave that started from 1917 USD. The ((Y)) wave belongs to the adjusted IV wave that started at $2,075.
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