Wall Street banks brace for downward revision of up to 1M fewer jobs — fueling worries the Fed failed to slash rates on time
By Ariel Zilber
Published Aug. 20, 2024, 4:12 p.m. ET
The federal government is poised to reveal that the US economy created as many as a million fewer jobs than previously thought in the 12-month period that stretched through the end of March.
The Bureau of Labor Statistics is expected to announce a significant downward revision of job growth statistics on Wednesday — a development that could fuel the perception on Wall Street that the Federal Reserve has waited too long to start slashing interest rates.
Experts at Goldman Sachs and Wells Fargo are predicting that the preliminary benchmark revisions on Wednesday will show that the economy created between 600,000 and 1 million fewer jobs than what was reported, according to Bloomberg News.
Economists at JPMorgan Chase foresee a downward revision of around 360,000.
A downward revision of more than 501,000 would be the largest in 15 years.
Traders will focus on comments by Fed Chair Jerome Powell on Friday at the Kansas City Fed’s Jackson Hole economic symposium for any new clues on the likely size of a rate cut next month, and whether reductions in borrowing costs are likely to happen at each subsequent Fed meeting.
The Fed has kept its benchmark interest rate high in recent years in hopes of bringing inflation down to its target of 2% without tipping the economy into a recession.
But a downward revision that would indicate a weakening job market will likely prompt critics of the central bank — which pointed to the robust labor market as one of the reasons to maintain its tight monetary policy — to argue that it waited too long to slash rates.
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https://nypost.com/2024/08/20/business/wall-street-banks-brace-for-downward-revision-of-1m-fewer-jobs/
