Economists had anticipated a significant reduction in the reported job figures, and the new numbers, if confirmed in the final revisions due in February, suggest that the average monthly job gains were 174,000 instead of the initially reported 242,000.
Despite the downward revision, over 2 million jobs were still created during the period. However, this update could indicate that the labour market is not as strong as earlier reports suggested, which may influence the Federal Reserve’s decision on interest rates.
Jeffrey Roach, chief economist at LPL Financial, commented, “The labour market appears weaker than originally reported. A deteriorating labour 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.”
Sector-specific revisions showed that professional and business services experienced the largest reduction, with job growth revised down by 358,000.
Other sectors affected included leisure and hospitality, which saw a decrease of 150,000 jobs; manufacturing, with a reduction of 115,000 jobs; and trade, transportation, and utilities, which were revised down by 104,000 jobs. Within the trade sector, retail trade saw a significant cut of 129,000 jobs.