(Washington) The U.S. economy added 818,000 fewer jobs from April 2023 to March of this year than initially reported, the government said Wednesday. The revised total again signals a continued slowdown in the labor market and likely reinforces plans for an early interest rate cut by the Federal Reserve.
The Labor Department estimated that job growth averaged 174,000 a month in the year that ended in March, down 68,000 a month from the 242,000 initially reported. The revisions released Wednesday were preliminary, with final figures expected in February of next year.
The revised estimate follows a much worse-than-expected July jobs report, leading many economists to suggest the Fed waited too long to start cutting interest rates to support the economy.
The unemployment rate rose for the fourth consecutive month, to a still-low 4.3%, and employers created only 114,000 jobs.
The Fed raised its benchmark interest rate 11 times in 2022 and 2023 to combat inflation, which hit a four-decade high more than two years ago. Annual inflation has since slowed significantly, to 2.9% from 9.1% in June 2022, paving the way for the Fed to begin cutting rates at its next meeting in mid-September.
The revised hiring estimates released Wednesday aim to better account for businesses that are being created or are going bankrupt.
This doesn’t undermine the idea that we are still in an expansionary phase, but it does indicate that we should expect monthly job growth to be more moderate and put additional pressure on the Fed to cut rates.
Robert Frick, an economist at Navy Federal Credit Union
Under the revisions, new jobs in professional and business services — a broad category that includes managers and technical workers — were reduced by 358,000 in the 12 months to March. Employers in the leisure and hospitality sector, including hotels and restaurants, added 150,000 fewer people than initially reported.