Spot gold remains firm and US employment recovery is weak; expected to force employers to change their obsessions

On Thursday (September 2), spot gold remained firm, and the U.S. dollar index fell to 92.376, the lowest point since August 6 recorded on the previous day. The US August ADP employment data released overnight fell short of expectations. People are paying more attention to the August non-agricultural employment data to be released on Friday (September 3).


At GMT+8 20:03, spot gold rose 0.11% to US$1815.80 per ounce; the main COMEX gold contract rose 0.13% to US$1818.3 per ounce; the US dollar index fell 0.10% to 92.417.


In the past few weeks, the U.S. dollar has been on the defensive because people have doubts about when the Fed will begin to cut back on its stimulus policy. Fed Chairman Powell said on Friday that the employment recovery will determine the reduction of the time for asset purchases. Coupled with the dovish comments of other Fed policymakers and weaker-than-expected US data, the US dollar index has fallen about 1.4% since it hit a nine-month high of 93.73 on August 20.

The US ADP employment data released on Wednesday was disappointing. Data show that last month, private employment in the United States increased by 374,000, which was less than the estimated increase of 638,000. The data makes people pay more attention to the August non-agricultural employment data to be announced on Friday (September 3)-the market predicts that there will be 725,000 non-agricultural jobs added.

Serious labor market mismatch

It is expected that the labor shortage in the United States will begin to ease in September. Because the unemployment relief measures provided by the federal government will expire on September 6, schools will also restart offline courses. However, a new wave of epidemics driven by the mutant strain Delta may cause some people to be reluctant to return to the labor market.

The COVID-19 pandemic has overturned the norm in the labor market. Even if 8.7 million people are still unemployed, the labor supply is still in short supply. As of the end of June, there were a record 10.1 million job vacancies in the United States. The serious mismatch in the labor market is mainly attributed to the lack of affordable childcare services, fear of contracting the coronavirus, generous unemployment relief provided by the federal government, and pandemics that have caused a large number of workers to retire early.

According to a survey conducted by the National Association of Early Childhood Education, 80% of early childhood educators working in childcare centers said that they will be understaffed at the end of June and early July. More than one-third of the interviewees said they are considering leaving this year or closing the centers they operate.

The shortage of childcare staff further restricts the childcare options of parents eager to return to work and creates more obstacles for working mothers. When schools implemented online teaching and nursery centers closed due to the pandemic, they were disproportionately squeezed out of the labor market.

Economists say that without reliable childcare services, it will be more difficult for parents to restore a stable work schedule, which may slow the recovery of the labor market. Many people had predicted that with the reopening of schools this fall, the recovery of the labor market would be hit, and the number of unemployed would increase.

A study released by the Atlanta Federal Reserve on Wednesday found that before the pandemic, women with children under the age of 6 accounted for 10% of the workforce, but 22% of them lost their jobs during the crisis. Atlanta Fed Research Fellow M. Melinda Pitts wrote in the report that the ability to find quality childcare services "may be a decisive factor affecting the employment of working mothers."

Taking into account the flow of the spot gold market, it can be said that the current position of investors is adjusted based on the increase in non-agricultural jobs that will be slightly lower than expected-the new jobs may be in the range of 550,000 to 600,000.

Companies change their concept of recruitment

With the expansion of the scope of COVID-19 vaccination, companies have begun to resume work, travel restrictions have been relaxed, and many employers are facing labor shortages. Workers who lost their jobs during the peak of the pandemic may now be very popular. In response to this situation, companies of all sizes have tried to raise wages in an effort to attract workers to return. However, in the view of some senior human resource management workers, merely increasing wages is not enough to allow companies to gain labor recognition in this challenging environment.

Synchrony Executive Vice President and Chief Human Resources Officer DJ Casto said: "Now is a very active period in the market, you will see some very big trends and changes, so you need to first ensure that you provide a competitive salary. But at the same time you You must also create the right workplace ecosystem to support your employees."

Casto said: "We not only provide a job that allows you to support your family, but also provide a way for you to invest in yourself and realize your professional ambitions. Salary is important, but the ability of people to achieve their professional ambitions is equally important. Because many employees are prepared Returning to the office in a certain capacity in the coming months, the company needs to focus on ensuring that this new way of working truly applies to everyone."

Nickle LaMoreaux, IBM's senior vice president and chief human resources officer, said that as more and more companies seek to fill technology and digital-centric vacancies, even traditional non-technology-intensive industries are facing potential technical labor shortages.

LaMoreaux said this has prompted IBM to remove the requirement for a degree in the recruitment process for more than 50% of the jobs, because the company is turning to a “skills-oriented recruitment method”, “as long as you master this skill, no matter what you How to get it, no matter where you get it from."

LaMoreaux pointed out that the company will also focus on the skills of existing employees and pay more attention to skills training. “Skills is not only for recruiting new employees, but also for retaining old employees. It is essential to ensure that there is no unfair competition environment.”

Joe Manimbo, senior market analyst at Western Union Business Solutions, said: “Of course, the recovery is uneven, but if the non-farm payroll report is also disappointing, it seems that this will delay the opening of the Fed’s door to reduce quantitative easing, and put the dollar with a certain amount. pressure."

The current situation of the epidemic is still not optimistic

The U.S. Transportation Security Administration (TSA) stated that they screened 1.345 million airline passengers on Tuesday (August 31), which is the lowest daily number since May 11 when COVID-19 cases surged in the U.S. . The United States still implements travel restrictions, prohibiting citizens from most countries in the world from entering the United States.

The TSA said Tuesday’s figure was down about 33% from the same day in 2019, when the number of travelers was 2.04 million. Southwest Airlines and other airlines have warned in recent weeks that the outbreak caused by the mutant new crown virus strain Delta has hit ticket bookings and the number of business cancellations has increased.

September 6th is this year's Labor Day in the United States, marking the end of the busy traditional summer tourist season. However, in the face of the Delta mutant strain, more and more large American companies are promoting the resumption of work, but at the same time continue to strictly restrict business travel. Airlines have been hit hard by the lack of business travel and sluggish international travel demand.

The American Airlines Association said that as of late August, American airlines’ domestic passenger traffic was 20% lower than pre-pandemic levels, while international air travel fell by 43%. The organization added that compared with before the outbreak of the new crown pandemic 18 months ago, American Airlines still reduced its domestic flights by 13% and its international flights by 34%.

Spot gold is expected to rise above 1835 US dollars

On the hourly chart, the price of gold started an upward (iii) wave trend from US$1785, and the upper resistance level looks to the 38.2% target of US$1835 and the 61.8% target of US$1865. The (iii) wave is a sub-wave of the upward wave ((i)) that started from $1680.