Government revises US economic performance for year ending in March: 818,000 jobs less than initially reported

The US economy revised its job growth numbers from April 2023 to March of this year, revealing 818,000 fewer jobs were added than initially reported. This adjustment underscores a slowing job market trend and is expected to support the Federal Reserve’s upcoming interest rate cuts. The Labor Department’s estimate shows job growth averaged 174,000 per month in the past year, marking a decrease from the initial report of 242,000 per month. These preliminary revisions will be finalized in February next year.

The recent job report for July was below expectations, prompting concerns that the Fed’s delay in lowering interest rates may have impacted the economy. The unemployment rate rose for the fourth consecutive month to 4.3%, and only 114,000 jobs were added in July. With inflation rates dropping significantly from 9.1% in June 2022 to 2.9%, the Fed is anticipated to begin rate cuts during its next meeting in mid-September.

The updated hiring estimates aim to provide a more accurate account of businesses that have opened or closed. Economists suggest that while the economy is still expanding, monthly job growth may be modest, leading to additional pressure on the Fed to reduce rates. Professional and business services jobs saw a reduction of 358,000 positions in the 12 months ending in March, while leisure and hospitality sectors reported 150,000 fewer jobs than previously stated.