Revised U.S. Employment Data Predicts Loss of One Million Jobs as Economic Concerns Mount

By: Georgia | Published: Aug 21, 2024

The latest from the U.S. economic front isn’t looking great. A hefty revision is on the horizon, potentially slashing job growth figures by a full million.

This significant downgrade is stirring up anxiety among financial bigwigs about the true state of our economy.

The Fed's Tightrope Walk on Interest Rates

It seems our economy might not be as hearty as we thought, challenging the Federal Reserve’s plans to cut interest rates.

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This news hits at a crucial time, as the Fed weighs its next moves in navigating these choppy economic waters.

Job Data Revision Set for This Week

Brace yourselves—new job growth numbers are coming out this week, with the complete report due next year.

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Everyone from Wall Street to Washington is on edge, knowing these revisions could sway economic policy decisions and future outlooks significantly.

Goldman Sachs Braces for Drastic Cuts

Goldman Sachs analysts are predicting a steep drop in job growth numbers, expecting a cutback of anywhere from 600,000 to a million jobs.

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This adjustment would radically alter our view of the job market’s strength over the past year.

A Record-Setting Correction?

If the job numbers are dialed back by more than 501,000, it’ll mark the most substantial revision in 15 years, per Bloomberg.

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This adjustment would hint at a job market that’s been weakening more and for longer than we had realized.

Rethinking Job Market Strength

The Bureau of Labor Statistics’ initial figures had us believing we were on a roll with 2.9 million jobs added up until March 2024.

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Now under review, these numbers—and our economic optimism—might need a serious recalibration.

A New Look at Monthly Job Gains

If the revisions are as deep as a million, our average monthly job additions would plummet to around 158,000.

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This drastic change would reveal a job market much less vigorous than previously portrayed.

Wells Fargo Analysts Point to Overestimations

“A large negative revision would indicate that the strength of hiring was already fading before this past April,” note economists Sarah House and Aubrey Woessner from Wells Fargo.

Front exterior view of a Wells Fargo bank building during the daytime.

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It appears the job market might not have been as robust as we were led to believe.

July's Job Growth Disappoints Massively

This past July, the job growth figures were a letdown, adding just 114,000 jobs—way below the expected 185,000.

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This miss has set off alarm bells, fueling fears that a recession might be closer than we’d hoped.

Unemployment Creeps Upward

Alongside sluggish job growth, the unemployment rate nudged up to 4.3%, the highest since October 2021.

'Help Wanted' sign displayed on a glass window reflecting city street.

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This uptick is adding to the gloom about the labor market’s health and its recovery prospects.

Markets on Pins and Needles for Data Release

“Markets, having recently experienced a growth scare that led to concerns that the Fed is behind the curve, will be monitoring Wednesday’s release of the benchmark revision to see if the market’s initial reaction was, in fact, correct,” said Quincy Krosby of LPL Financial.

Exterior view of the Federal Reserve building with steps and columns

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The stakes are high, and the financial markets are watching closely.

What This Means for the Fed’s Next Steps

The adjustments in job figures will play a big role in Jerome Powell’s upcoming speech in Wyoming.

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How these revisions pan out could significantly impact the Fed’s upcoming decisions on interest rates, which they’ve hinted might start to lower as soon as September after a prolonged period of highs.