The latest <a href="https://www.bls.gov/news.release/empsit.nr0.htm">US non-farm payrolls</a> number came in worse than expected. A mere 142k jobs were created in August, below the median consensus of 160k, although above estimates of 120k. However, the unemployment rate remained steady at 4.2%.Making matters worse, both June and July’s numbers were also revised downwards. June saw its numbers decrease to 118k from 179k, while July’s fell to 89k from 114k. Meanwhile, average hourly earnings on a year-on-year basis also came in above consensus of 3.7%, at 3.8%, leaving the Federal Reserve in a tight spot as higher wage growth could leave inflation stickier than expected.Even so, the odds of a 50bps rate cut has now jumped to 47%&nbsp;from 43% yesterday. Equity and bond markets have had a rather mixed reaction, however. The S&amp;P opens roughtly flat at 0.2%, while the 10Y yield has remained unmoved at 3.73%. Both GBP/USD and gold have also returned to their pre-jobs report levels of $1.3181 and $2,540, respetively, having spiked earlier.Newspage asked economists, analysts, and experts for the views on the potential of a US recession, what this means for gold, and what it could spell for the US dollar.<figure class="image"><img src="https://cdn.newspage.media/production/company/11483/files/cfa8c5fa95bc53ad42b67de4cefc9d7c8067969fe820140f45a0fe16abe072f613f9494f7d061d6975ec2016f1108498ca20f6be6291232424096c5968e33e89.webp"></figure>

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US Fed could cut 50bps after latest job numbers

The US labour market is showing signs of fatigue. The weaker-than-anticipated job growth paired with the downward revisions to last month's numbers adds weight to the argument that the US economy may be edging closer to a recession. With the labour market showing signs of cooling. this could bolster the case for a more significant Fed rate cut in September, as markets begin to price in a shift towards a 50bps cut. For gold, this could be a catalyst for higher prices, with the weaker employment figures prompting investors to seek refuge in the precious metal, and the resulting lower real yields could further boost gold's appeal. The GBP/USD pair may see significant movement, with the softer dollar providing an opportunity for sterling to gain ground. While it's premature to sound the alarm based on a single data point, the softening labour market could be an early indicator of broader economic challenges ahead.

Gabriel McKeown

I am an analyst working in the institutional investment consulting sector, and the founder of Sad Rabbit Investments. I provide in-depth investment research reports focusing primarily on Global Equities, Multi-Asset, and Macroeconomics. Sad Rabbit is an investment research platform with a single defining goal: to democratise access to financial markets. We didn’t think it was fair that only professionals get access to the best investment research and market data. So, we have developed tools to help level the playing field for private investors and released these completely for free!

August's job numbers might not spell recession, but with the NFP’s habit of downward revisions in recent months, today’s 142k could shrink faster than a wool sweater in hot water when the September data is released next month. A 50bps rate hike is now squarely on the radar, as economic slowdowns have a nasty habit of snowballing very quickly. Meanwhile, gold bugs are grinning as the greenback loses its lustre, while the pound might fancy a comeback tour to hit $1.33 or higher in the coming days.

John Choong

John Choong is currently ranked the number one analyst in the UK, according to stock tip-recommendation website, Stockomendation. His share tips provide investors with actionable insights as he successfully identifies sectors and companies with consistent growth potential. Aside from that, John's often conducts research and analysis of macroeconomic as well as financial data that consists of plenty of unique insights which you might not otherwise find elsewhere.

The US economy appears to be more resilient than expected given the recent concerns that it is heading for a nasty recession. However, the markets have increased their expectations of a "jumbo" 50bps cut which will have an impact on our shores should that happen.

Riz Malik

R3 Wealth is an independent financial advice firm dedicated to empowering individuals, families, and businesses in navigating the complexities of financial management. Our mission is to provide customised, strategic financial planning that aligns with our clients' unique goals and values.