Despite recession storm clouds growing darker by the month, the U.S. labour market has proven surprisingly resilient, but the tides now appear to be turning with another increase in unemployment claims confirmed in the latest Labor Department figures.
The official report tracking employment rates shows that the number of people filing first time unemployment claims has risen sharply. Last week, we reported that the number of people filing continuing claims – those struggling to find a new role after being let go – had risen.
This week, the number of people finding themselves newly unemployed has leaped from last week’s tally of 218,000 workers to a new estimate of 231,000. It’s worth noting that the volume of new unemployment claims surprised to the upside, with experts calling for a figure of around 220,000. This suggests that the economy is cooling at a much quicker rate, something which will be incredibly favourable to gold prices in the near term.
The number of people filing ongoing claims as they remain unable to find a job has also increased, from 1.833 million to 1.865 – a ways above the expected figure of 1.847 million. This rise indicates that employers are disinclined to create new jobs and reluctant to take on new people. Of course, this hesitance also points to a cooling of the economy, indicative of growing fears of recession.
While the unemployment data is the worst we have seen in a while, it spells very good news for gold prices. If the jobs market is finally running out of steam, the Federal Reserve is likely to consider rate cuts, something it said wouldn’t be possible while employment levels were robust. If that’s the case, we could see cuts rather than hikes set the tone for 2024. Should that happen, expect the gold bulls to smash through previous price records.
There’s no time to waste. Buy gold now.
