A recent government report revealed that the U.S. economy actually added 818,000 fewer jobs from April 2023 through March this year than originally reported. This revision highlights a slowing job market trend, which is likely to prompt the Federal Reserve to start cutting interest rates soon.
According to the Labor Department, job growth averaged 174,000 a month in the year that ended in March, a significant drop from the initial estimate of 242,000 a month. The final numbers are set to be released in February next year.
The downgraded job estimate comes on the heels of a disappointing July jobs report, which saw the unemployment rate rise to 4.3% and only 114,000 jobs added. Many economists believe that the Fed may have delayed cutting interest rates to support the economy.
With inflation falling from a four-decade high to 2.9%, the Fed is now expected to begin cutting rates at its next meeting in mid-September. The revised hiring estimates aim to provide a more accurate reflection of the job market, accounting for newly created or closed businesses.
Economists suggest that the job market is still in expansion, but monthly job growth is expected to be more restrained. The revisions show reductions in professional and business services jobs, as well as leisure and hospitality jobs. Overall, the revised data underscores the continued challenges in the job market and the need for economic stimulus measures.
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