Commodities extended their decline, touching the lowest level in almost eight months, after U.S. employers created fewer jobs than economists estimated and Chinese manufacturing slowed.
The Standard & Poor’s GSCI Spot Index fell 2.1 percent to 583.53 at 10:27 a.m. in New York, after touching 578.35, the lowest level since Oct. 4. The index has dropped 6 percent this week, heading for a fifth straight decline and the biggest since September. Oil, natural gas and gasoline led the losses.
U.S. payrolls climbed by 69,000 last month, less than the most pessimistic forecast in a Bloomberg News survey, Labor Department figures showed today in Washington. China’s Purchasing Managers’ Index fell to 50.4 in May from 53.3 in April, China’s statistics bureau and logistics federation said today in Beijing. Euro area and U.K. manufacturing contracted.
“The U.S. payroll numbers were significantly weaker than expected and the PMI out of China and the U.K. were terrible as well,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas-based energy consultant. “We’re getting very weak data going into June and the markets don’t like it. Economies are slowing and demand will fall.”
Commodities also dropped after a report showed unemployment in the euro area reached 11 percent in April and March, the highest since the data series started in 1995. The European debt crisis that began in Greece has spread to Ireland, Portugal, Italy and Spain, has curbed economic growth and demand for fuel.
Crude oil for July delivery fell $2.64, or 3.1 percent, to $83.89 a barrel on the New York Mercantile Exchange. The contract dropped to $82.56, the lowest intraday price since Oct. 7. Prices fell 17 percent in May, the biggest slide since December 2008.
Brent oil for July settlement fell $2.91, or 2.9 percent, to $98.96 a barrel after falling as low as $97.70 on the ICE Futures Europe exchange in London, the lowest level since Feb. 8, 2011. Brent is down 7.8 percent this year.
Natural gas for July delivery dropped as much as 9 cents, or 3.7 percent, to $2.332 per million British thermal units on the Nymex. Futures are down 22 percent this year and dropped to a 10-year intraday low of $1.902 on April 19.
Copper fell in New York, heading for the longest streak of weekly declines in two years. Copper futures for July delivery retreated 1 percent to $3.333 a pound on the Comex after falling to $3.30, the lowest this year.
On the London Metal Exchange, copper for delivery in three months was 0.3 percent lower at $7,386.50 a metric ton ($3.35 a pound). Aluminum, tin, lead and nickel also fell in London. Zinc rose. The LME will be closed June 4-5 for U.K. public holidays.
Gold rose the most since Sept. 27 on speculation that the Federal Reserve will take steps to stimulate growth. Gold futures for August delivery jumped 3.2 percent to $1,613.70 an ounce at 10:21 a.m. on the Comex in New York.
Silver futures for July delivery climbed 2.6 percent to $28.49 an ounce on the Comex. Prices fell 11 percent last month.
The GSCI Spot Index dropped 13 percent last month, the worst monthly loss since November 2008.