In testimony to Congress, Federal Reserve Chairman, Jerome Powell all but confirmed that additional rate hikes are on the way, even as the latest U.S. labour market data showed that the market is beginning to cool.
Speaking to the Senate Banking Committee, Powell all but guaranteed tough rate hikes will continue, saying, “Nothing about the data suggests to me that we’ve tightened too much – indeed, it suggests that we still have work to do. It’s hard to make a case that we’ve over-tightened. It means we need to continue to tighten.”
His comments coincided with the release of fresh unemployment data issued by the U.S. Labor Department. Its figures show that unemployment is beginning to creep up, with new weekly jobless claims rising by more than 20,000 people, from 190,000 to 211,000. A figure of just 195,000 had been expected, suggesting the pace of layoffs had taken economists by surprise.
The number of continuing claims, which tracks those who remain out of work also increased, rising by 69,000 people to 1.72 million unemployed. The four-week moving average also grew, up from 193,000 to 197,000.
This data is significant when taken in line with the Federal Reserve’s intention to continue rate hikes as it gives further credibility to fears of an imminent recession.
The gold bulls put on a show of strength in the wake of this data, immediately climbing in trading to around £1,530 ($1,825).
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