I decline in job growth in US: Labour Department report

Main points:

  • According to a Labor Department report, the growth of non-farming jobs in the U.S. has decreased by 818,000.
  • In the period from April 2023 to March 2024, the real increase was about 2 million, compared to the previously estimated 2.9 million jobs, which is about 30% lower.
  • This decline is -0.5%, which is the biggest revision since 2009.
  • Professional and business services recorded the biggest drop of 358,000 jobs.

Detailed description of the report:

According to this report by the Department of Labor, the growth rate of jobs in the U.S. has been much lower than previously estimated. In the period from April 2023 to March 2024, a total of 2.9 million new jobs were estimated, but the actual figures were only 2 million. This marks a loss of 818,000 jobs, which is a major drop and also the biggest revision since 2009.

The biggest decline was seen in professional and business services, where estimated data showed a loss of 358,000 jobs. In addition, the leisure and hospitality sector saw a loss of 150,000 jobs, the manufacturing sector 115,000, and the business, transport and utilities sector 104,000. Retail trade figures have also been revised, showing a loss of 129,000 jobs.

Some sectors also saw a modest increase, such as 87,000 in private education and health services, 56,400 in transportation and warehousing, and 21,000 in other services. There has been only a modest increase of 1,000 in government jobs.

Economic approach:

After this revision, the total number of non-agricultural jobs reached 158.7 million by July 2024, showing an increase of 1.6% over the same period in 2023. However, the 4.3% increase in the unemployment rate has indicated weakness in the economy. The unemployment rate has increased by 0.8% in the last 12 months, indicating a recession situation, in accordance with the “Saham rule”.

The Federal Reserve may now consider the possibility of cutting interest rates at the September meeting, taking into account this weakening situation. Federal Reserve Chairman Jerome Powell’s speech at Jackson Hole, Wyoming, could signal further monetary policy, which could be important for investors.