(Kitco News) – The shine is starting to come off the one bright spot in the U.S. economy as job growth last month was weaker than expected, according to the latest data from the Labor Department.
Friday, the Bureau of Labor Statistics said 151,000 jobs were created in January, down from December’s revised number of 292,000 — the initial report had December’s job gains pegged at 292,000; the employment gains were well below consensus forecasts, which were expecting to see 192,000 jobs.
November’s job data was revised higher to 280,00 from the previous level of 252,000. According to the report jobs gains over the last three months averaged 231,000. Despite the weaker than expected headline number, the unemployment rate fell to 4.9%, lower than consensus forecasts of an unchanged reading at 5.0%. The participation rate came in at 62.7%, little changed from December’s level.
In other positive news, January saw a significant increase in wages. The report said that average hourly earnings last month increased 12 cents to $25.39, up 0.5% from December and well above expectations of a 0.3% increase. In the last 12 months the the department said that earnings are up 2.5%.
The mining sector continues to be shed jobs as 7,000 positions were lost last month. The report noted that since peaking in September 2014, the sector has lost 146,000 jobs, or 17%.
Royce Medes, said that although the headline employment number was a disappointment, investors can take some solace in the fact that there were some positive highlights in the report.
“Today’s below consensus payroll figure doesn’t change the fact that they’ve been growing at a solid pace recently,” he said. “The data today appears to offer something for Fed doves and hawks alike.””Today’s below consensus payroll figure doesn’t change the fact that they’ve been growing at a solid pace recently,” he said. “The data today appears to offer something for Fed doves and hawks alike.”
Gold took a hit following January’s nonfarm payrolls data; however, Jim Wyckoff, senior technical analyst at Kitco noted that investors could be taking profits has prices have been trading near a three-month high. As of 8:55 a.m. April Comex gold futures were trading near session lows at $1,150.10 an ounce, down $7.40 on the day.
Paul Ashworth, chief U.S. economist at Capital Economics also highlighted rising wages and the falling unemployment rate as two positive highlights overshadowing the disappointing headline number. He noted that the employment rate is now at its lowest point in 8 years and wages appear to be in an “upward trend.”
Marc Chandler, global head of currency strategy at Brown Brothers Harriman, said that today’s employment data doesn’t justify growing recession talk. “That the US economy hit a soft patch is indisputable. However, this is not the same thing as a contraction,” he said.
By Neils Christensen of Kitco News; nchristensen@kitco.com
Follow Neils Christensen @neils_C
