U.S. Added 818,000 Fewer Jobs Than Reported. Here's What That Could Mean for the Fed's Plan to Cut Interest Rates. Job growth figures across multiple sectors saw significant downward revisions.

By Erin Davis

Key Takeaways

  • Preliminary annual benchmark revisions show the U.S. economy added 818,000 fewer jobs than first reported, marking the largest revision since 2009.
  • Revised job data indicates a softer labor market, possibly influencing the Federal Reserve's decision towards a September interest rate cut.

The Labor Department reported Wednesday that the U.S. economy produced 818,000 fewer jobs from April 2023 through March 2024 than initial tallies suggested.

The 0.5% total payroll level revision—the most substantial dip since 2009—was nearly 30% less than the initially reported 2.9 million.

The Bureau of Labor Statistics's revisions came after the agency analyzed data from the Quarterly Census of Employment and Wages, part of an annual process that occasionally reveals departures from monthly updates.

"The revisions aren't a shock, given the estimates were for one million fewer jobs," Robert Frick, corporate economist with the Navy Federal Credit Union, said in a note, per Bloomberg. "This doesn't challenge the idea we're still in an expansion, but it does signal we should expect monthly job growth to be more muted and put extra pressure on the Fed to cut rates."

Related: CPI Report: Inflation Hits 3-Year Low, Analysts Predict Fed Will Cut Rates Next Month

The revisions resonated throughout sectors, including professional and business services, which saw job growth reduced by 358,000. Leisure and hospitality, manufacturing, and trade, transportation and utilities also faced significant downward corrections.

Meanwhile, Federal Reserve Chair Jerome Powell's upcoming speech in Wyoming is being closely watched for any hints of eased monetary policies, especially with the expected rate cut in September.

"The labor market appears weaker than originally reported," Jeffrey Roach, chief economist at LPL Financial, told CNBC. "A deteriorating labor market will allow the Fed to highlight both sides of the dual mandate and investors should expect the Fed to prepare markets for a cut at the September meeting."

Related: The Federal Reserve Is on Instagram

Erin Davis

Entrepreneur Staff

Freelance Writer

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Side Hustle

This Mom's Side Hustle Selling a $600 Children's Toy Became a Business Making Over $1 Million a Year: 'There Is a Lot to Love'

Shari Raymond, a mother of three, was looking for a specific toy — and was "shocked" when she couldn't find it.

Business News

Morgan Stanley Plans to Lay Off 2,000 Workers, Replacing Some with AI

Morgan Stanley's planned job cuts are both performance and AI-based.

Starting a Business

A Teen With Cerebral Palsy Pitched a Creative Product in School. He Got a B- — Then Grew the Business to $5 Million a Year Anyway.

Drew Davis, founder of Crippling Hot Sauce, uses humor and business to make a major impact.

Business News

The Fed's Decision to Keep Rates Steady Is 'Unsurprising,' According to a JPMorgan Expert. Here's Why.

Federal Reserve Chair Jerome Powell said that the Fed wasn't in any rush to make rate adjustments.