A new round of data released this week makes one thing clear; the shadow of recession continues to loom over the U.S economy and further strengthen the gold bulls’ charge to a new all-time high.
Yesterday (Thursday) the Philadelphia Federal Reserve issued its latest Manufacturing Business Outlook. The data showed that productivity levels have continued to sharply decline, with output now at its lowest level in almost two years.
While March’s reading was also in negative territory at -23.2, a recovery had been expected. Analysts had forecast a -19.7 reading for April however, the data showed that trajectory to be wide of the mark. The actual figure of -31.3 is the lowest since the pandemic era of May 2020.
This decline confirms that the economic wheels are slowing – an indicator that a recession is knocking at the door. Further confirming this outlook is the latest unemployment data, which continues to climb. Those figures also took analysts by surprise, suggesting that the pace of economic decline was wholly unexpected.
While economists had expected that the total number of new jobless claims would remain the same as last week’s upwardly revised total of 240,000, the actual number was 245,000.
The U.S. Labor Department data also showed that continuing jobless claims had grown, up from 1,804,000 last week to 1,810,000. A spokesperson said, “This is the highest level for insured unemployment since November 27, 2021 when it was 1,964,000.”
As the second piece of data to highlight that some sectors of the economy have now dipped to Covid levels, all eyes will be on the Federal Reserve and its next monetary policy announcement. If they are moved to pause rate increases as a result of this data, expect the gold bulls to rapidly set a new price high. Don’t wait for that day to come. Position yourself for success by buying now.
