The U.S. economy added 911,000 fewer jobs than previously estimated in the year ending March, as indicated by preliminary Labor Department data released on Tuesday. This annual payroll report revision reveals a slower job market growth than earlier anticipated at the close of the Trump administration and the beginning of the Biden administration. Economists had predicted a downward revision, but the weaker numbers have raised concerns about the economic stability.
The Federal Reserve is monitoring the job market closely and is expected to consider lowering its benchmark interest rate after maintaining it thus far in 2023. This decision comes in light of indications of a slow job market and concerns regarding potential inflation triggered by ongoing tariffs. In August, the Labor Department reported a modest addition of just 22,000 jobs, which was lower than expectations, with the unemployment rate rising slightly from 4.2% to 4.3%.
The revisions to job growth data emerge amid politically sensitive circumstances for the Bureau of Labor Statistics, particularly after President Trump recently dismissed the agency’s head, alleging misconduct without substantiation. Analysts attribute some job market difficulties to the president’s policies on tariffs and immigration, which have faced criticism for potentially harming economic growth.
While these revisions may be politically leveraged by the Trump administration to argue against claims of economic weakness, perceptions remain mixed. White House Press Secretary Karoline Leavitt suggested that the data supports criticisms of the Biden administration’s economic management.
Despite these developments, the S&P 500 index showed little movement shortly after the news broke, although investor sentiment remains cautious. Upcoming inflation data is anticipated, which could intensify concerns about stagflation, where economic growth slows amid rising consumer prices. Broad adjustments in job figures were seen across various sectors, particularly in services like leisure and hospitality, raising some skepticism about the resilience of the labor market.
Source: https://www.bbc.com/news/articles/cn8257jz8kvo?at_medium=RSS&at_campaign=rss