In “Cavuto: Coast to Coast,” Barron's senior writer Megan Leonhart responded to the U.S. economy adding 818,000 fewer jobs than initially reported.
Federal Reserve Chairman Jerome Powell The central bank said on Wednesday that policymakers had taken into account reports that recent employment data was “artificially high” and could be revised downwards as they assess the health of the labor market before deciding on a 50 basis point interest rate cut.
In a press conference after the meeting, Chairman Powell explained that since policymakers last met in late July, they have received two sets of employment reports and two sets of inflation reports, as well as the Bureau of Labor Statistics' Quarterly Survey of Employment and Wages.
“We have two Employment Report“July and August. And we've had two inflation reports, including one that came in during the blackout. The QCEW report suggests that the employment numbers that we're getting may be artificially inflated and will be revised downward,” Powell said.
“So we took all of that into consideration, we went into the blackout, we looked at what to do and we came to the conclusion that this was the right thing to do for our economy, for the people that we serve, and that was the decision we made,” he said of how he arrived at the rate cut.
Fed cuts interest rates by half a percentage point: what you need to know
Federal Reserve Chairman Jerome Powell said policymakers took the downward revision in employment data into account when deciding to cut interest rates for the first time in four years. (Anna Moneymaker/Getty Images/Getty Images)
The Ministry of Labor last month announced the QCEW for the 12 months from April 2023 to March 2024, Downward revision Employment fell by 818,000 people during the period.
This is the largest downward employment revision in the report since 2009, resulting in a monthly decline of 68,000 payrolls over the same period. The QCEW is provisional and subject to further change when the annual adjustment is released in February.
U.S. economy creates 818,000 fewer jobs than last reported
The Labor Department said last month that 818,000 fewer jobs will be created between April 2023 and March 2024. (Yuki Iwamura/Bloomberg via Getty Images/Getty Images)
Latest Monthly Employment Report The period following the release of the QCEW also includes a downward revision of the employment growth rate for the previous month.
The estimated payroll gain in April is 108,000, after being revised down by 10,000 in May and 57,000 in June.
Payroll gains in May were estimated at 216,000, after downward revisions of 54,000 in June and 2,000 in July.
U.S. economy adds 142,000 jobs in August, below expectations
Monthly employment reports are regularly revised upward or downward as more data comes in, but recent months have seen notable downward revisions. (Joe Raedl/Getty Images/Getty Images)
Taking into account downward revisions of 27,000 in July and 61,000 in August, payrolls increased by an estimated 118,000 in June.
July saw an estimated 89,000 job gains, following a downward revision of 25,000 jobs in August.
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of Ministry of Labor Revision Revisions to employment reports are made to improve the accuracy of revised estimates by including additional information that was not available when the report was first released.
The revised estimate takes into account data from firms in the sample that did not report payroll data at the time of the Bureau of Labor Statistics' first release. The Bureau of Labor Statistics states on its website that, for example, the average collection rate at the time of the first release in 2012 was 73.1% of firms.
