Nonfarm payrolls increased by 254,000 jobs in September over a forecasted gain of just 150,000 and the unemployment rate retracted from 4.2% to 4.1%, according to jobs data released by the U.S. on Friday.
DOW Jones futures jumped 200 points and gold surrendered $17 an ounce to trade at $2,638 following the news.
Inflation talk begins again
The unexpectedly strong report reignited a discussion among pundits on whether or not the Federal Reserve has shifted its focus away from inflation and toward the job market too quickly.
Saira Malik, head of global equity portfolio at TIAA Global Asset Management, said on CNBC that the new report could give the Fed reason to pause and reevaluate its shifted priorities.
“(This report showed) the August rebound in payrolls was not a blip,” she said. “What does this mean for the Fed in November? I think we’re moving back to a 25 basis point cut instead of 50 in November, but the market has been pretty defensive recently and that’s because the market is worried about geopolitical issues, oil prices increasing … I think the Fed needs to move back to more balance. It’s not just about the labor market; it’s about inflation too, moving forward.”
Silver prices moved lower along with gold, dropping $0.52 an ounce to $31.68, a 1.63% loss in about 30 minutes of trading following the report.
CNBC senior economics reporter Steve Liesman said he doesn’t feel the jobs report means inflation is automatically ramping back up.
“The story for the Fed here is if you have the labor supply to meet the labor demand, that is not inflationary,” he said. “What’s why rates should continue to come down, but as Rick (Santelli) pointed out, not in 50-point increments.”
Santelli bucked Liesman’s comments saying inflation fears should be taken more seriously.
“Listen, there’s not the type of wage inflation spiral that I saw 35 or 40 years ago, but there definitely does seem to be, under the surface, that dynamic. I think the Fed will have an inflation problem, not that it’ll be huge, but it will bounce around and have some life,” he said. Augusta Precious Metals $0 (10 Years) $50,000 "Best Overall" by Money Magazine, Award-Winning for 6 Years, Thousands of 5-Star Rankings Goldco Vary $25,000 Industry leader with over $2 Billion in gold and silver. Top rated precious metals company with buy back guarantee American Hartford Gold Vary $10,000 American Hartford Gold, ranked #1 Gold Company on Inc. 5000, boasts thousands of A+ BBB ratings and 5-star reviews, endorsed by Bill O'Reilly and Rick Harrison..Expand Details
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