Market futures jumped, gold prices collapsed and talking heads had a hay day expressing their opinions about February payroll data. According to reports, 236,000 new jobs were added, well above the forecasts of the entire panel of experts. Prodding the bull moment, the unemployment rate dipped to 7.7%.
Prior to the announcement, one of the panel mediators commented that he hopes the number comes in so much higher than expectations that the markets can conquer the wall of worry once and for all and explode to new record high after record high.
On cue, wishes were granted – or were they? By the time the markets opened, exuberance had settled. Stocks traded well below futures indicators and after falling off a cliff (see the chart) the gold price rocketed $20 higher. The entire event turned into a trading point not a turning point.
These numbers take a while to digest. This morning, the truth eluded six of the seven panelists and three show anchors. Barely referred to was the fact that 130,000 workers dropped out of the workforce. Given a workforce size of 140 million, that means another .1%, or so, of the workforce has become self-unemployed.
From February 2012 to February 2013, BLS data shows a total of 1.579 million workers have exited the workforce. During the same period 1.369 million people found jobs. It looks to me like there are 210,000 fewer jobs, but somehow the unemployment rate from Feb. 2012 dropped from 8.6% to 7.9%. (data may be revised slightly by the time BLS adjusts web site report) Suffice it to say, however, the numbers just don’t add up. Not working has become the fastest growing career – AHHBullTweet!
In this past week there are a couple instances where we could look to the gold price to learn the truth about world or market events. Don’t you think if there was any chance in Heaven that North Korea could nuke us that gold prices wouldn’t immediately double, triple or quadruple into infinity? That threat wasn’t even enough to make the Gold Bull’s tail swish at a fly.
And, now we have jobs data that was expected to flip the risk-on switch and send stocks higher and gold lower. Yes, the gold bull was caught napping. But upon awakening, the gold price charged 20 bucks higher and the truth be told So much for the great jobs data.
Don’t believe me? Follow the links and look for yourself and if you want to follow me on twitter, I would be honored. @DaveTheGoldDR
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