The employment situation
The US Bureau of Labor Statistics published employment reports for September this morning. They included the unemployment rate, the labor force participation rate, and the average hourly earnings rate.
The US unemployment rate dropped to 4.8 percent, from 5.2 percent in the previous month. This was below market expectations of 5.1 percent. It was the lowest rate since March 2020. Still, the jobless rate remained well above the pre-crisis level of around 3.5 percent. There is still an ongoing labor shortage but it continues to slowly improve.
As a reminder, the last JOLTs report showed nearly 11M job openings. The new report will come out next week Tuesday.
The labor force participation rate in the United States was little-changed at 61.6 percent in September and has remained within a narrow range of 61.4 percent to 61.7 percent since June 2020. The participation rate is roughly 1.7 percentage points lower than it was pre-crisis in February 2020.
Average hourly earnings for employees continues to increase. This month it rose another 19 cents. This is a 4.6% increase year-over-year.
Bottom line, there are jobs out there for those that want to work and employers are raising wages to try to attract some help. The labor force participation rate shows that many are either in the gig economy or retiring. This is putting a big strain on the economy. It is very close to running red hot but the logistics and labor shortage are holding it back.
However, the fireworks are coming. There have been two separate articles that I’ve seen in the past week talking about central banks buying gold. The first is from BullionStar. Their report showed that the Indian central bank has been accumulating large quantities of gold. At 724.24 tonnes of gold, India is the 9th largest gold holding country in the world. On Tuesday, Zerohedge covered Poland’s central banks gold buying. They included this graph of gold buying central banks for the first half of 2021.
While it looks like gold is still struggling to move higher, this is a big floor under its current price.