A mixed reaction to Friday's nonfarm payrolls data helped the precious metals bounce higher in early trading. Spot gold was essentially flat at $1,277/oz, recovering from losses earlier in the session. Spot silver gave back modest gains, returning to about $17.10/oz.
Platinum and palladium were just barely below unchanged.
The big nonfarm payrolls report this morning showed that 261,000 new jobs were added during October, which was short of estimates over 300,000. August's numbers were revised significantly higher. Wage growth during the month slowed, but average hourly compensation is still up 2.4% year-on-year.
Some analysts found ways to take the data as encouraging, while others found it disappointing. The numbers were well below expectations, but still showed that hiring around the country recovered after hurricanes severely impacted September's data. The NFP confirmed much of what the ADP payrolls showed earlier this week: job growth was seen across sectors.
A separate survey by the Labor Department released today suggested that the unemployment rate fell to 4.1%, yet the Labor Participation rate also tumbled to 62.7%. Overall, this all indicates that the outlook for the labor market is fairly muddled.
Reaction around the markets was muted. The dollar was mostly flat at 94.66 on the DXY index following the payrolls. The yield on 10-year Treasury notes was two basis points lower to 2.34%. WTI crude traded in positive territory at $54.70 per barrel. Global stocks opened the session higher on the last trading day of the week. Japanese markets were closed for holiday.
Investors received greater details about the new tax plan from congressional Republicans yesterday. Much of the proposed bill is in line with the general policies that the White House and Treasury Department have been outlining. The measure would simplify the tax code by reducing the number of tax brackets from six to just four. Paired with a higher standard deduction, this means virtually everyone in the country making under $1 million would see a cut to their income tax, while those earning over $1 million would continue to pay the same rate of 39.6%. The corporate tax rate would be lowered from 35% to 20%. To help cover some of the tax cuts, the plan would eliminate certain state and local tax (SALT) deductions as well as cutting the mortgage interest deduction by 50%.
While many of these details could change through the legislative process, both President Trump and congressional leaders have expressed a desire to pass the proposed tax overhaul before the end of the calendar year.
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