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All Roads lead to NFP This Friday
By Mark O’Brien, Senior Broker
General:
The U.S. economy continued its recent strong stretch of growth this summer, bolstered by strong consumer and government spending. The Commerce Department reported this morning that the nation’s Gross domestic product increased at a 2.8% annual rate in the third quarter, adjusted for seasonality and inflation.
Despite the report showing a slight slowdown from the second quarter’s 3% rate, and coming in below economists’ expectations for a 3.1% pace, and even in the face of the historically high borrowing costs that carried into the period, the July-to-September quarter marked a continuation of a roughly two-year streak of strong growth for the U.S. economy.
Indeed, the economy has outperformed expectations over the past couple of years. A much-anticipated recession has yet to materialize, even though the Federal Reserve raised interest rates aggressively to curb inflation in recent years. Wednesday’s report points to an economy that is still humming, with strong consumer spending supported by a robust labor market, and business investment that remains solid.
Metals:
We’re blogging like a broken record when it comes to covering gold futures. The price of the front month December contract touched another all-time record high last night, trading briefly over $2,800 per ounce and it’s looking like it’ll post a close above there based on its old 10:30 A.M., Central Time pit session close today.
Much of the credit for the increased demand can be tied to simmering tensions in the Middle East and the uncertainty over the upcoming presidential election in the U.S., now just six days away.
Kudos to analysts at Citi who raised their three-month forecast for gold prices to $2,800 per ounce earlier this month. They’re still looking for a move to $3,000 over the next 6–12 months.
Soy Complex:
January soybeans, which is now the most actively traded contract, closed at $9.79 per bushel on Monday. That put prices within striking distance of that futures contract’s intraday life-of-contract low at 973½ posted on August 14th.
Heads up:
It’s that time of the month again: we’re a couple of days from when the Labor Dept. releases its monthly Non-farm payrolls report. It’s widely considered to be one of the most important and influential measures of the U.S. economy and the report is released at 7:30 A.M., Central Time on the first Friday of the month.
To review, the Labor Dept.’s Bureau of Labor Statistics surveys about 141,000 businesses and government agencies, representing approximately 486,000 individual work sites. The report excludes farm workers, private household employees, domestic household workers and non-profit organization employees. The report also includes other detailed industry data including the overall unemployment rate as a percentage of the total labor force that is unemployed but actively seeking work, wages, wage growth and average workday hours. |
