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(Wallace Refiners) – The U.S. labor market struggled to find momentum as fewer workers found jobs in November, according private payrolls processor ADP.
Wednesday, ADP said that 307,000 jobs were created this past month, significantly missing expectations; consensus forecasts were calling for job growth of around 433,000.
ADP employment is seeing its slowest job gains since July. Historical data shows that private-sector employment has only beat expectations once in the last six months.
However, the gold market is not paying much attention to the latest economic data. The market continues to see technical buying after prices fell sharply lower last month. February gold futures last traded at $1,828 an ounce, up 0.5% on the day.
While news of potential vaccines is creating some hope among investors that the U.S. economy will see a faster than expected recovery, economists note that weak labor market growth could be a headwind in 2021.
Some economists have noted that the latest private sectors data provides some downside risks ahead of Friday’s non-farm payrolls report. However, they also note that ADP is not a consistent predictor of the government’s official numbers
Paul Ashworth, chief U.S. economist at Capital Economics said that the latest employment numbers illustrates the impact of the renewed surge in coronavirus infections and the resulting restrictions on activity.
He added regardless of the ADP number, the firm is sticking with its expectations for Friday’s nonfarm data to disappoint.
“Overall, we’re happy to stick with our estimate that non-farm payrolls increased by a below-consensus 400,000 last month, but we would be very wary of claiming that the ADP somehow validates that forecast,” he said.
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