Copper Rises as Drop in Jobless Rate May Signal Recession End
By Millie Munshi
Aug. 7 (Bloomberg) -- Copper rose, capping a fourth straight weekly gain, after an unexpected decline in the U.S. jobless rate signaled the recession may be easing.
The July unemployment rate fell to 9.4 percent from 9.5 percent in June, the first drop since April 2008, the Labor Department said today. Economists surveyed by Bloomberg News projected a rise to 9.6 percent, the median of 80 estimates. Copper has surged 98 percent this year on speculation that improving economic growth will boost demand for metals.
“Today’s report is really adding to the mindset that the worst is over and the economy has bottomed,” said Michael K. Smith, the president of T&K Futures & Options in Port St. Lucie, Florida. “I see more upside for copper.”
Copper futures for September delivery climbed 3.35 cents, or 1.2 percent, to $2.7855 a pound on the New York Mercantile Exchange’s Comex division, up 6.2 percent for the week. Earlier, the metal dropped as much as 1.9 percent on concern this year’s rally may have been exaggerated.
“People were getting worried that prices had moved too far, but with every new report that comes out, we see evidence that the global economy is turning,” Smith said.
Today’s report showed the pace of job cuts slowed last month. Employment fell by 247,000 positions, after a revised loss of 443,000 in June, while the number of unemployed workers rose to 14.5 million last month, the Labor Department said.
“The July jobs report provided a number of encouraging developments that deliver the message that economic weakness is subsiding,” Alex Heath, the head of industrial metals trading at RBC Capital Markets in London, said today in a report.
On the London Metal Exchange, copper for delivery in three months rose $125, or 2.1 percent, to $6,150 a metric ton ($2.79 a pound). Among other metals traded on the LME, aluminum, zinc, tin, lead and nickel gained.
To contact the reporter on this story: Millie Munshi in New York at [email protected]
PNA Price at posting:
$1.93 Sentiment: None Disclosure: Not Held
