WASHINGTON — The U.S. government has revised its job growth figures, revealing that the economy added 818,000 fewer jobs between April 2023 and March 2024 than initially reported. This revised data indicates a steady slowdown in the job market, likely strengthening the Federal Reserve’s stance on imminent interest rate cuts.
According to the Labor Department, job growth averaged 174,000 per month in the year ending March, down from the previously reported 242,000. While these revisions are preliminary, final numbers will be released in February 2025.
This revised estimate follows a disappointing July jobs report, prompting many economists to argue that the Fed had delayed rate cuts for too long. The unemployment rate rose to 4.3% for the fourth consecutive month, a still low figure, but employers added only 114,000 jobs.
In a bid to combat inflation, which peaked at a four-decade high over two years ago, the Fed raised its benchmark rate 11 times in 2022 and 2023. Inflation has since significantly declined, dropping from 9.1% in June 2022 to 2.9%, paving the way for potential rate cuts by the Fed at its next meeting in mid-September.
The revised hiring estimates aim to more accurately reflect the impact of companies entering or exiting the market.
“While this doesn’t challenge the notion that we’re still in a period of economic expansion, it does suggest that we can anticipate more muted monthly job growth. This will likely further incentivize the Fed to implement rate cuts,” said Robert Frick, economist at the Navy Federal Credit Union.
The revisions indicate a reduction of 358,000 professional and business services jobs, a broad category encompassing managers and technical workers, in the 12 months ending March. Leisure and hospitality employers, including hotels and restaurants, added 150,000 fewer jobs than initially reported.