The U.S. economy created 818,000 fewer jobs than originally reported in the 12-month period through March 2024, the Labor Department reported Wednesday.
As part of its preliminary annual benchmark revisions to the nonfarm payroll numbers, the Bureau of Labor Statistics said the actual job growth was nearly 30% less than the initially reported 2.9 million from April 2023 through March of the following year.
That’s about 65,000 less per month.
For the most part, the Feds are aware and cognizant of revisions – not a new trend. In fact, this is a preliminary estimate. The final revision will be issued in February 2025.
But the magnitude may be a little surprising.
Job growth in the U.S. through March is expected to have been much weaker than estimated, which could spur calls for deeper interest rate cuts amid concerns that the Federal Reserve may have waited too long to start its easing cycle.
The Bureau of Labor Statistics is expected to issue a preliminary benchmark revision to payroll growth for the 12 months ending March on Wednesday at 10 am ET.
Economists at Wells Fargo expect the reading to be at least 600,000 weaker than initially estimated. JPMorgan expects a decline of about 360,000, while Goldman Sachs said it could be as large as a million.
The revision may have some impact on Fed Chair Jerome Powell’s speech at Jackson Hole on Friday, given the Fed’s dual mandate of promoting maximum employment and stable prices.
A large downward revision “could reignite concerns around a weaker employment picture,” said Charu Chanana, head of FX strategy, Saxo. “This is something that Powell may need to address, and if the jobs report on September 6 shows significant weakness, it could bolster the case for a 50-basis point rate cut.”
“The revision shouldn’t alter our views of the current labor market too much as the direction and general magnitude of this revision has been known for some time, but a particularly bad revision would reinforce the case for easing,” said 22V Research’s Peter Williams.
