WASHINGTON (AP) — The U.S. economy added 818,000 fewer jobs between April 2023 and March of this year than originally reported, the government said Wednesday. The revised total reinforces the Federal Reserve’s plan to start cutting interest rates soon, with the job market slowing steadily.
The Labor Department estimated job growth averaged 174,000 in the year ended March — down 68,000 a month from the 242,000 initially reported. The revisions released on Wednesday are preliminary and the final numbers will be released in February next year.
The downgrade follows a jobs report for July that was worse than expected, leading many economists to say the central bank waited too long to start cutting interest rates to support the economy. The unemployment rate rose for the fourth month in a row to a still-low 4.3%, and employers added just 114,000 jobs.
The central bank raised its benchmark rate 11 times in 2022 and 2023 to fight inflation, which hit a four-decade high two years ago. Year-on-year inflation has fallen – from 9.1% in June 2022 to 2.9%, clearing the way for the central bank to start cutting rates when it meets next in mid-September.
The revised hiring estimates released Wednesday are meant to give a better account of companies being created or going out of business.
„It doesn’t challenge the idea that we’re still in an expansion, but it should expect monthly job growth to be more muted and put additional pressure on the Fed to cut rates,” said Robert Frick. Navy Federal Credit Union.
Among the revisions, new professional and business services jobs — a broad category that includes managers and technical workers — fell by 358,000 in the 12 months ended in March. Leisure and hospitality employers – including hotels and restaurants – added 150,000 fewer than originally reported.
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