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Key Takeaways
- The U.S. economy likely lost an average of 20,000 jobs per month between April and September, rather than the reported average gain of 43,000 jobs per month, Federal Reserve Chair Jerome Powell said.
- A downward revision of job growth would be yet another red flag about the health of the labor market.
The job market, already thought to be slowing down, may be in even worse shape than it seemed at first.
The U.S. economy likely gained an average of around 60,000 fewer jobs each month than previously reported between April and September, Federal Reserve Chair Jerome Powell said at a press conference last week.
Currently, the Bureau of Labor Statistics reports that the economy gained 119,000 jobs in September, the most recent data available on the labor market. However, if Powell’s estimate is correct, the actual number was about half that. Moreover, the economy may have actually lost an average of 20,000 jobs each month since April instead of gaining about 40,000 as previously reported.
Why This Matters
A weaker labor market can pressure wages, consumer spending, and confidence, shaping expectations for future Fed rate cuts.
Powell did not cite a source for his figures, but the Fed has a staff of economists who carry out economic research to inform the central bank’s policy decisions.
If Powell’s comments are correct, the lower figures could come to light next year when the bureau carries out its annual revision of the previous year’s job creation statistics to incorporate data that wasn’t available when the monthly reports are published. It would be the latest in a series of red flags about the labor market, which is being slowed by tariff-related uncertainty and President Donald Trump’s immigration crackdown, among other factors.
“I think you can say that the labor market has continued to cool gradually, maybe just a touch more gradually than we thought,” Powell said.
