The prospect of higher rates has made non-interest-bearing gold less attractive.
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The Federal Reserve is watching job growth and the status of wages as it ponders when to hike its benchmark interest rate for the first time in nearly a decade.
It was the seventh straight day of declines for the Dow Jones industrial average. The commodity sold off after Baker Hughes data showed U.S. oil rigs rise by 6 to a total 670 over the week.
The S&P 500 fell 5.99, or 0.3%, to 2077.57, and the Nasdaq Composite declined 12.90, or 0.3%, to 5043.54.
U.S. employers added 215,000 jobs in July, signaling another month of modest, steady job gains and likely nudging the Federal Reserve closer to raising interest rates in September. But many frustrated job seekers have stopped looking for work, perhaps only temporarily.
In an interview with The Wall Street Journal this week, Atlanta Fed President Dennis Lockhart said that he was ready to move in September as long as the economic data did not prove disappointing.
The central bank has kept rates at a near-zero level since December 2008 as part of its effort to spur the recovery from the 2007-2009 financial crisis. “The Fed seems to be gliding toward a rate increase quite soon”, Irwin wrote.
Not all of them do.
Some within the financial sector say the September rate increase isn’t the foregone conclusion it’s being portrayed as. Pay increases, for example, are still sluggish.
An additional 14.4 million people have left the job market, either through abandoning their job searches or through going into retirement.
ACTIVIST STAKE: American Express jumped $4.95, or 6.6 percent, to $79.95 after Bloomberg reported that activist investors ValueAct Capital Management had amassed a $1 billion stake in the credit card company.
On Friday, the Labor Department announced that 215,000 new jobs were created in July. The Fed last month upgraded its assessment of the labour market, describing it as continuing to “improve, with solid job gains and declining unemployment”. That is close to the 5 to 5.2 percent range the Fed views as normal for maximum employment over the longer run. But much or all of that gain comes from companies cutting costs and/or buying back stock. But Fed governor Jerome Powell struck a more cautionary tone in comments to CNBC, citing the need to evaluate Friday’s jobs report among other forthcoming statistics before deciding on timing. If it is wrong – if rate increases are premature and inflation doesn’t return to the 2 per cent the central bank targets, and workers never see the meaningful raises they’ve been awaiting – then Fed officials will have only themselves to blame. Now, more than a half-dozen years into the recovery, Fed Chair Janet Yellen has suggested that the economy not only can tolerate but needs higher rates.
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Both analysts we spoke with predict an interest rate hike before the year ends. More job growth for blacks bodes well for the rest of the job market. The economy recorded just a 1.5 per cent growth in the first half of the year, being below the last three years’ average by 0.5 per cent. The result is that the share of adults working has fallen to 59 percent from almost 63 percent eight years ago.
