U.S Employment Increased by 146k in November | Gold and Silver little Changed

The U.S. employment rose again by a higher pace than many had expected during November: according to the latest U.S. employment report, which was published today, December 7th by the Bureau of Labor Statistics the number of non-farm employees expanded by 46,000. The main sectors that grew during November were in professional and business services, and health care.

The rate of unemployment edged down to 7.7%. Gold and Silver prices are moderately rising along with other commodities prices.

The chart below shows the revised figures of the number of non-farm employees grew in the labor market during recent years (up to November 2012). The change in non-farm payroll was revised down for September from +148k to +132k; For October it was revised from +171k to +138k. The revised down figures for October and September suggest the employment situation in the U.S hasn’t improved in the past couple of months as it was claimed earlier.

As I have calculated in the past, the number of non-farm payroll employment needed to be added to the U.S labor market on an average monthly rate to keep with the growth of the U.S. civilian work force around 107k. This means that the recent rise in employment in was higher than this threshold.

U.S. Nonfarm payroll employment up to 2012 November 2

The rate of U.S. unemployment edged down in November to 7.7%. The rate of unemployment is at its lowest since mid-2008. The current unemployment rate is 2.1 percent points lower than its rate in November 2010.

Furthermore, the number of unemployed persons (12million) remained virtually unchanged in November compared to the previous month.

Following this news currently, the Euro/USD exchange rate is slightly falling along with the GBP/USD; crude oil price is edging down while the U.S stock market indexes are slightly rising; gold price is also edging up.

Now let’s breakdown how this news might affect the direction of commodities prices, including the prices of gold and crude oil:

Gold Market

As I have already pointed out in the recent gold and silver prices monthly outlook, historically, if the non-farm payrolls expand by at least the population growth rate (roughly 107k), gold price tended to decline; this correlation was mostly due to the effect this news has had on the speculation of the Fed intervening again the U.S financial.

The table below presents the correlation between the news of the U.S. non-farm payroll employment changes and the daily shifts in gold and silver prices on the day of the U.S. labor report publication. The table below shows the negative correlations between the U.S employment and daily shifts of precious metals.

U.S.Labor Reports in 2012 gold price and silver prices December 7 2012

Crude Oil Market

The recent rise in the non-farm employment is higher than many had anticipated and is well above the 100k mark which is a positive sign for the progress of the U.S. economy from the perspective of the U.S’s work force. On the other hand, the previous employment figures for October and September were revised down and yet they have remained well above 100k. This could suggest the price of oil might slightly rise.

For further reading: