Non-farm payroll data is coming! The report is expected to show the slowest hiring pace in years, could gold prices take off again?

Huitong Finance APP News - Friday (November 1) will see the release of the US October non-farm employment report. The market expects that the number of jobs added in October will only be 100,000, the lowest level in nearly four years, which is expected to provide further upward momentum for gold prices , and may even push it to a new all-time high.

Strong hurricanes and large-scale labor strikes may significantly reduce the number of non-farm jobs in October, which is expected to be the slowest month of job growth in nearly four years.

According to a Dow Jones survey, economists expect: The US Bureau of Labor Statistics will report on Friday that, impacted by Hurricanes Helene and Milton, and the Boeing strike, only 100,000 jobs were added this month. If this prediction is accurate, this would be the lowest total employment since December 2020, a significant drop from 254,000 in September.

The report will be released at 8:30 PM Beijing time, and the unemployment rate is expected to remain unchanged at 4.1%.

Historical Data Overview (January 2022 - September 2024)

Michael Arone, chief investment strategist at State Street Global Advisors, said: "When we look at the employment data, the unemployment rate is expected to remain low, and I think wage growth will outpace inflation. Both of these data points will highlight the health of the US economy."

In terms of wages, average hourly earnings are expected to increase by 0.3% this month, up 4% year-on-year, the same year-on-year growth rate as in September, further confirming the argument that inflation is persistent but not accelerating.

Historical Overview of Year-on-Year Salary Growth Rate

Regardless of the outcome, the market may selectively view this report, as various one-off events (hurricanes and strikes) have suppressed hiring.

Arone added, "The data may be a bit noisy, but I think there's enough information to continue to determine that a soft landing is still possible, and the US economy remains in good shape."

The hurricanes caused what may be historically high levels of property damage, while the Boeing strike has left 33,000 workers unemployed.

Goldman Sachs estimates that Hurricane Helene cut as many as 50,000 jobs, although Hurricane Milton may have formed too late to affect October's statistics. Meanwhile, the Boeing strike may have reduced the total number of jobs by 41,000, with Goldman Sachs predicting overall job growth of 95,000.

Other data has remained stable

Despite the impact of storms and strikes, the upcoming highly anticipated employment report shows that hiring activity continues to accelerate and the layoff rate is low.

The ADP report shows that private sector employment increased by 233,000 in October, far exceeding expectations. Meanwhile, initial jobless claims fell to 216,000, the lowest level since the end of April.

The White House estimates that these events combined may have reduced the total workforce by 100,000. "This disruption will make interpreting this month's employment situation more difficult than usual," said Jared Bernstein, chairman of the Council of Economic Advisers, on Wednesday.

Overall, post-pandemic employment data has been somewhat chaotic.

Earlier this year, the Bureau of Labor Statistics announced benchmark revisions, removing 818,000 people from previous statistics during the 12-month period ending March 2024. From the beginning of the year to July this year, these revisions have already reduced the initial estimates by 310,000.

"This report will reinforce the overall picture that the labor market is still growing. But the reality is that growth is slowing," said Julia Pollak, chief economist at ZipRecruiter. "Growth is slowing and becoming increasingly narrowly concentrated in a few sectors."

The main areas of job creation this year have been government, healthcare, leisure and hospitality. Pollak said this will continue, especially in healthcare, while ZipRecruiter is also seeing greater interest in the market for related businesses such as technology, finance and insurance.

However, she said the overall picture is that the market is slowing down and needs some help from the Fed to cut interest rates to prevent a downturn.

Pollak said: "Over the past two quarters, job growth has been below the pre-pandemic average, and the distribution of job growth has been unusually narrow. "This has a real impact on job seekers and employees, who feel their bargaining power is weakened, and many are struggling to find relatively ideal jobs. Therefore, I do believe the Fed should keep a close eye on the labor market."