The U.S. economy added 818,000 fewer jobs from April 2023 through March 2024 than initially reported, according to the Labor Department. The revised figures, released on Wednesday (August 21), suggest a slowdown in the job market, likely reinforcing the Federal Reserve’s plan to start cutting interest rates soon.
“The labor market appears weaker than originally reported,” Jeffrey Roach, chief economist at LPL Financial, said, according to Fox Business. “A deteriorating labor market will allow the Fed to highlight both sides of the dual mandate, and investors should expect the Fed to prepare markets for a cut at the September meeting.”
The Labor Department estimated that job growth averaged 174,000 a month in the year that ended in March, a drop of 68,000 a month from the 242,000 initially reported. These revisions are preliminary, with final numbers to be issued in February next year.
The revised hiring estimates are intended to better account for companies that are either being created or going out of business. The largest downward revisions were in professional and business services jobs, which were reduced by 358,000 in the 12 months that ended in March. Leisure and hospitality employers added 150,000 fewer jobs than first reported.
The Federal Reserve raised its benchmark rate 11 times in 2022 and 2023 to fight inflation, which hit a four-decade high more than two years ago. Year-over-year inflation has since plummeted — from 9.1% in June 2022 to 2.9%, clearing the way for the Fed to begin cutting rates when it next meets in mid-September.
Recent Comments