WASHINGTON, Aug. 21 (Xinhua) -- The U.S. Labor Department reported on Wednesday that monthly payroll data had overestimated job growth by approximately 818,000 over the 12 months ending in March, signaling a weaker labor market than previously reported.
The latest announcement indicates that employers actually added around 174,000 jobs per month during that time, instead of the previously reported average of about 242,000 jobs per month.
The revisions are preliminary, and the final revision will be issued in February 2025 with the publication of the January 2025 Employment Situation news release, the department noted.
More recent data, unaffected by the revisions, indicated that job growth continued to slow. The Labor Department reported in early August that U.S. employers added 114,000 jobs in July, with the unemployment rate increasing to 4.3 percent, which marked the highest since October 2021.
With the latest data for July, the unemployment rate has been trending up for four months, as the labor market is showing signs of weakness.
"The (July) employment report was surprisingly weak," and strengthened the case for a near term rate reduction, Barry Bosworth, economist and senior fellow at the Brookings Institution, told Xinhua earlier.
"Combined with the price report, it may be a tipping point for the Fed," Bosworth said.
The Consumer Price Index (CPI) in July increased 2.9 percent from a year ago, after climbing 3.0 percent in June and 3.3 percent in May, the Labor Department reported last week.
Dean Baker, a senior economist at the Center for Economic and Policy Research, told Xinhua earlier that barring some big surprises, it can be assumed that the Fed will cut rates in September.
The only real question is whether it is 0.25 percentage points or 0.50 percentage points, he said.
The Chicago Mercantile Exchange Group's FedWatch Tool, which acts as a barometer for the market's expectation of the Fed funds target rate, showed that the probability of the Fed cutting rates by 25 basis points at the September meeting is 67.5 percent as of noon on Wednesday.
This is a sign that "cracks in the labor market are more severe and began forming earlier than initially believed," said The New York Times (NYT) in its report about the change.
"The updated numbers are the latest sign of vulnerability in the job market, which until recently had appeared rock solid despite months of high interest rates and economists' warnings of an impending recession," the newspaper reported.
Federal Reserve officials are paying close attention to the signs of erosion as they weigh when and how much to begin lowering interest rates, added the report.
