Yet another gold bull catalyst is emerging. Get ready for another wave of inflation because it’s definitely on the way.

April 18 (King World News) Peter Boockvar:  Initial jobless claims totaled 212k, 3k less than expected and unchanged with the week before. The 4 week average of 215k was also flat with last week. Continuing claims were also little changed but holding above 1.8mm at 1.812mm, near the highest since November 2021

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The bottom line remains the same with the muted pace of firing’s, at least as measured here, and the slowing pace of hiring’s in every stat and anecdote outside of the BLS payroll report.

In contrast to the negative April NY manufacturing index and adding hope that US manufacturing is finally showing signs of bottoming, the April Philly index bounced to +15.5 from +3.2 and that was well above the estimate of +2.0.

The internals though were hugely volatile and much more mixed with new orders up by 7 pts to +12.2 but backlogs little changed at just above zero at .8 while inventories fell more than 13 pts to -8.9.

“Brother, can you spare a job?”
Employment remained deeply negative at -10.7 which is the weakest since 2016 not including Covid.

Employment Collapses To Weakest Since 2016 (Minus COVID Plunge)

Inflation Warning
The workweek plummeted to -18.7 from -.2. Outside of Covid, go back to June 2009 the last time it was that low. Delivery times (capturing the supply chain) was less negative but still reflecting much smoother supply chains. Prices paid though jumped to 23 from 3.7 and that is a 4 month high and likely coincident with the rise in commodity prices we’ve seen.

Expect More “Transitory Inflation”

Prices received, where prices paid takes time to flow thru to, rose a touch to 5.5 from 4.6.

As for the 6 month business outlook, after jumping to the highest since the summer of 2021 last month, it receded slightly but apparent that manufacturers are more hopeful that a bottom in their business is finally in after about a 2 yr recession. How long it takes to lift off the bottom remains to be seen but hopefully the worst is in. There was also a 17 pt m/o/m jump in expectations for prices paid and points again to my belief that goods price disinflation is over. Capital spending plans slipped but after bouncing over the past few months.

Bottom line, manufacturing around the world is trying to find a bottoming in activity with end demand and an eventual need for inventory restocking determining the timing and pace of the rebound. Those two factors driving a sustainable improvement are not yet in place I believe.

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