Gold prices push into positive territory as U.S. ADP says 89K jobs created in September, significantly missing expectations

NEW YORK (October 4) The gold market is seeing some healthy buying as the U.S. labor market continues to show signs of cooling as the number of private sector jobs created last month significantly missed expectations.

Wednesday, private-sector payrolls processor ADP said that 89,000 jobs were created last month. The data was significantly weaker than expected, as economists were looking for job gains of around 154,000.

"We are seeing a steepening decline in jobs this month. Additionally, we are seeing a steady decline in wages in the past 12 months," said Nela Richardson, chief economist at ADP, in the report.

The report said this was the slowest growth since January 2021.

"Large establishments drove the slowdown, losing 83,000 jobs and wiping out gains they made in August," the report said.

Although the gold market remains on its back foot, the disappointing employment data has created some buying momentum as prices pushed into positive territory on the day in initial reaction. December gold futures last traded at $1,843.30 an ounce, up 0.08% on the day.

Also supporting gold prices is a sharp drop in wages. The report said that salaries for employees who stayed in their jobs last month increased 5.9%. The report said this is the twelfth straight decline in wages. At the same time, employees who changed jobs last month saw their wages increase by 9%, down sharply from 9.7% in August.

Looking at a breakdown in the labor market, the report said that goods-producing industries created 8,000 jobs last month. The manufacturing sector lost 12,000 jobs last month; the natural resource and mining sector created 4,000 jobs and the construction sector created 16,000 jobs in September.

Meanwhile, service-providing industries created 81,000 jobs in September. Professional/businesses services lost 32,000 jobs last month while trades and utilities saw job declines of 13,000; the information sector created 1,000 new positions last month; the financial industry saw 17,000 new positions created in September; education and health services sector created 10,000 jobs; the leisure and hospitality sector created 92,000 jobs and other sectors created 6,000 jobs last month.

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