U.S. job growth revision indicates economic weakness

According to preliminary data released Tuesday by the Labor Department, the U.S. economy has 911,000 jobs cut from the initial estimate.

The regular annual report – a revision of wage data – shows that the job market has grown slower than before when the Biden administration ended and in the previous months.

Economists are expected to make a lot of downside revisions, but weaker figures raise weaker concerns about the health of the world’s largest economy.

The Fed is closely watching signs of softness in the job market ahead of next week’s meeting.

The US Central Bank is It is expected to lower its benchmark interest rate After maintaining steady pace so far this year, concerns that tariffs from U.S. President Donald Trump could reignite signs of inflation.

Last week, the Labor Department reported Employers only added 22,000 jobs In August, the unemployment rate rose from 4.2% to 4.3%, while the unemployment rate was less than expected. Tuesday’s data increased the slowing job market, strengthening expectations that the U.S. central bank will lower interest rates next week.

The revision of job growth was politically for the Bureau of Labor Statistics. Just a few weeks ago, President Trump responded to signs of slowing By firing an agentaccusing Erika Mcentarfer of no evidence, making the numbers make him look bad.

Analysts say the latest trouble in the job market is partly due to the president’s overall changes to tariffs and immigration policies, which economists have been warning of harming the economy.

But the Department of Labor amendment, including part of the Biden administration, could push President Trump, who opposed claims that his policies have fueled weaker job markets.

“President Trump is right: Biden’s economy is a disaster, and the BLS is broken,” White House press secretary Karoline Leavitt said in a statement Tuesday.

She reiterated the Trump administration’s long-term call for Fed Chairman Jerome Powell to “lower interest rates.”

Wall Street has largely surpassed the revision of job growth, while the S&P 500 has remained stable in early trading on Tuesday. But investors are still on the edge.

New inflation data is scheduled to be released on Thursday. Chris Zaccarelli, chief investment officer at Northlight Asset Management, said this could cause fears that traps – economic growth will slow down while consumer prices will fall – reach the forefront.

Zaccarelli added that while the job market deteriorates, “it should make it easier for the Fed to lower rates this fall, it may also put some cold water on the recent rally.”

The Department of Labor’s revisions are based on extensive revisions, with particularly large-scale adjustments to the service sector, including leisure and hospitality.

“Since services are the last bastion of employment growth, this is not good for the overall health of the labor market,” said Bradley Saunders, an economist in capital economics in North America, in a research note.