Significantly fewer jobs were added to the U.S. economy than first reported during the last year, after a revision to data published previously, likely solidifying the probability of the U.S. Federal Reserve implementing an interest rate cut in Sept.
The Bureau of Labor Statistics revised down employment gains for March 2024 by 818K positions as part of the agency’s yearly benchmark review of payroll data.
When averaged through the previous year, that amounts to around 68K fewer net jobs added per month.
ING analysts said in a note that as inflation slowly converges to target, financial markets are becoming increasingly sensitive to recession worries, and the downward revision of job numbers may result in another risk-off episode.
Goldman Sachs cautioned investors to look at the revisions carefully as they may overstate the jobs growth downgrade.
The investment bank highlighted that the key source data for the yearly benchmark revision was the Quarterly Census of Employment and Wages (QCEW).
Goldman Sachs analysts said that as the QCEW was based on unemployment insurance records, it likely excludes most unauthorized immigrants, who they believed have contributed in a major way to employment growth over the past few years.
