The Bureau of Labour Statistics has released a revised estimate of U.S. employment, disclosing a drastic decline of 818,000 jobs since the previous report. The new estimate that came out on Wednesday, August 21, represents the largest downward revision since the Great Recession of 2009, raising concerns about the overall strength of the job market.
The report reveals that job creation in the U.S. for the 12 months ending in March was 0.5% lower than previously estimated.
US Job market sees largest downward revision since 2009
As recession fears grow global markets have fluctuated in recent weeks—likely due to a weak U.S. jobs report. The nation’s labour market likely created 818,000 fewer jobs than initially reported during the twelve months ending in March as reported by Post. This means that the actual job growth during that period was approximately 30% lower than previously stated, with the monthly average falling from 242,000 jobs to 174,000.
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Job loss has become a major concern among Americans
Just yesterday, CNN reported that job loss is causing major anxiety among Americans . The latest survey from the Federal Reserve Bank of New York on consumers’ labor market experiences and expectations revealed a decline in satisfaction with jobs, wages, and benefits in July. Additionally, a smaller percentage of people are currently employed, with a record number still searching for jobs. Moreover, the average expected likelihood of unemployment has increased to 4.4%, the highest, the report remarks.
The massive markdown is making economists worry
The update matches what experts were expecting, but it shows that job creation has been slower than the numbers first showed up which is quite concerning. Even though the drop isn’t as big as some people thought it would be, it’s still much bigger than the more optimistic predictions of 300,000 jobs. Additionally, this development occurs during an election season where the economy remains a top priority for voters. This big change raises worries that the Federal Reserve waited too long to cut interest rates.
“This doesn’t challenge the idea we’re still in an expansion, but it does signal we should expect monthly job growth to be more muted and put extra pressure on the Fed to cut rates,” said corporate economist Robert Frick in a statement to the Post.
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Weak July jobs report sparks concerns
Jerome Powell, the head of the Fed, has signalled that the central bank might be thinking about lowering interest rates for damage control. Powell will share his thoughts on this at the central bank’s yearly gathering in Jackson Hole, Wyoming, this Friday.
The report follows a disappointing July update, with the unemployment rate climbing for the fourth consecutive month. Job growth fell short of expectations, with only 114,000 jobs added, while the unemployment rate rose to 4.3%. The next jobs report is expected on September 6. Despite this, a recent survey found that Americans remain hopeful about abundant job opportunities.