NEW YORK (Reuters) – The U.S. economy likely created 911,000 fewer jobs in the 12 months through March than previously estimated, the government said on Tuesday, suggesting job growth was already stalling before President Donald Trump’s aggressive tariffs on imports.
Economists had estimated that the Labor Department’s Bureau of Labor Statistics could revise the level of employment from April 2024 through March 2025 down by between 400,000 and 1 million jobs. The level of employment for the 12 months through March 2024 was downgraded by 598,000 jobs.
MARKET REACTION
STOCKS: U.S. stocks were last down on the day. S&P slipped 0.1%.
BONDS: U.S. Treasury 10-year yield briefly dropped after the report, but was last up 3.4 basis points at 4.078%
FOREX: The dollar index extended gains, and last traded up 0.2% at 97.63.
COMMENTS:
PAUL NOLTE, SENIOR WEALTH ADVISOR AND MARKET STRATEGIST, MURPHY & SYLVEST, CHICAGO:
“Certainly the Fed is already geared to cut rates based on weaker jobs, the job situation as a whole. This does nothing to dissuade the Fed from moving 25 basis points. It’s a little bit more than expected. We don’t know month by month and won’t for a few more months yet, but it points out that labor is weak.”
“This is, though, in contrast to the weekly jobless claims numbers, which have pretty much been in line with periods of decent economic growth. And we still have consumer spending still in pretty good shape. So I think this is a piece of the puzzle. It’s by no means a complete puzzle in an indication of how the economy is doing.”
MICHAEL JAMES, MANAGING DIRECTOR FOR EQUITY TRADING, ROSENBLATT SECURITIES, LOS ANGELES:
“The job revision furthers the Fed rate cut narrative. We’ll get a little more data Thursday morning from the (Consumer Price Index) CPI but meaningful reduction in labor growth, furthers the narrative for the Fed rate cut cycle to begin later this month. That’s keeping a better bid for equity markets overall this morning.”
MICHAEL BROWN, SENIOR RESEARCH STRATEGIST, PEPPERSTONE, LONDON:
“In all honesty, I don’t think this really changes much in terms of the market or Fed policy outlook. Clearly a chunky downward revision, which leads you to believe that the labor market might well have been stalling, or at least losing momentum, for longer than we’d previously expected, but that’s about all one can gleam from the data.”
“It’s all rather stale so it won’t move the needle for policymakers on the FOMC, who remain on track to cut 25 bps next Wednesday, nor for markets, with swaps having hardly budged across the curve since the figures crossed.”
“If it tells us anything, it’s that the BLS really do need to improve their data collection methods ASAP, as that’s now 2 chunky downward benchmark revisions in consecutive years, though President Trump clearly has his own ideas – possibly misplaced ones – about how they can do that.”
BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN:
“The preliminary benchmark revision was a lot bigger than expected. The final revisions won’t be released until February. Most likely, the BLS was over-guessing how many new businesses were being formed in 2024. The flipside is that the BLS could be underestimating how many new businesses are currently being formed.”
“The Fed’s decision to deliver a super-sized cut in September 2024 is vindicated since payroll growth in August 2024 will likely be revised to a negative 5,000. If the Fed was justified in cutting 50 bps in September 2024, it could be justified in cutting 50 bps in September 2025. The more likely course is for the Fed to deliver an October and December cut rather than trying to deliver a catchup cut in September.”
(Compiled by the Global Finance & Markets Breaking News team)
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