US payroll growth in the year through March may have been weaker than >previously reported - to the tune of 500,000 jobs - resulting in less-
robust numbers that could make the Fed think twice about further rate
hikes, according to a report.
US payroll growth in the year through March may have been weaker than previously reported — to the tune of 500,000 jobs — resulting in less-
robust numbers that could make the Fed think twice about further rate
hikes, according to a report.
Last year, the US Bureau of Labor Statistics employment reports
repeatedly shocked economists with larger-than-expected payroll gains
that saw over 10 million job openings for 20 straight months — a record-breaking streak that ended in January and a key reason behind
the Federal Reserve’s continued interest rate hikes.
However, Daniel Silver, an economist at JPMorgan Chase, estimates that
when the federal agency’s preliminary benchmark revision is released
on Wednesday, it will be nearly half a million off from the level of
total employment reported in the year through March, according to a
report shared with The Post.
If Silver is correct, that would mean there are 40,000 fewer jobs per
month over the 12-month period ended in March than the BLS originally reported.
It’s typical for the BLS to revise its past jobs reports. Typically,
with every month of fresh payroll data, the agency looks back at the
two previous months and edits its database accordingly.
In its latest July jobs report — when hiring cooled to its lowest
level since 2020 — the BLS revised May by 25,000, meaning it’s more
likely that 281,000 jobs were added to the US economy that month
rather than the 306,000 originally reported.
The BLS also benchmarks March payroll data in a more accurate report
that covers nonfarm employment called the Quarterly Census of
Employment and Wages (QCEW), which is based on state unemployment
insurance tax records.
Once March payroll figures are established, the change is
proportionally distributed across the prior 12 months.
The BLS’ first-quarter QCEW report will be released on Wednesday.
Despite expectations that the QCEW will show weaker payroll growth
figures, Silver said in his report that “the revised average monthly
rate of job growth would still look strong over the year through March
2023, at around 300,000.”
The figure, Silver noted, “would be trimmed down from the 337,000
average pace currently shown in the BLS data.”
Standard Charter Bank analyst Steven Englander estimates that the
downward revision could be even worse than Silver predicts, at around 650,000, according to Bloomberg.
That would indicate “a much weaker labor market profile” than what
guided Fed tightening in recent quarters, Englander told the outlet.
“This would reduce the pressure for further hikes.”
Bloomberg Economics’ Stuart Paul also believes the QCEW data will be
weaker than recent headlines suggest.
“People who have been outright saying ‘the labor market is tight’
might be in for a shock,” he told Bloomberg.
It’s the US job market’s supposed resilience that has played an
important role in the Fed’s decision to hike interest rates to a
22-year high last month, increasing the benchmark federal-funds rate
to a range between 5.25% and 5.5% in an effort to bring inflation back
down to its pre- pandemic level of 2%.
Fed officials have warned that strong hiring can often fuel inflation
if companies feel compelled to raise pay to attract and keep workers.
Thus, a slowdown in job growth and pay raises could help the Fed reach
its 2% inflation target.
When The Post sought comment from the BLS, a spokesperson declined to
comment on estimates, adding that they can only “answer questions
about published BLS data.”
https://nypost.com/2023/08/22/us-payroll-may-lose-500000-jobs-in-us- government-data-revision/
On 23 Aug 2023, useapen <yourdime@outlook.com> posted some >news:XnsB06914C5D3BFABX@135.181.20.170:
US payroll growth in the year through March may have been weaker than
previously reported — to the tune of 500,000 jobs — resulting in less-
robust numbers that could make the Fed think twice about further rate
hikes, according to a report.
Last year, the US Bureau of Labor Statistics employment reports
repeatedly shocked economists with larger-than-expected payroll gains
that saw over 10 million job openings for 20 straight months — a
record-breaking streak that ended in January and a key reason behind
the Federal Reserve’s continued interest rate hikes.
However, Daniel Silver, an economist at JPMorgan Chase, estimates that
when the federal agency’s preliminary benchmark revision is released
on Wednesday, it will be nearly half a million off from the level of
total employment reported in the year through March, according to a
report shared with The Post.
If Silver is correct, that would mean there are 40,000 fewer jobs per
month over the 12-month period ended in March than the BLS originally
reported.
It’s typical for the BLS to revise its past jobs reports. Typically,
with every month of fresh payroll data, the agency looks back at the
two previous months and edits its database accordingly.
In its latest July jobs report — when hiring cooled to its lowest
level since 2020 — the BLS revised May by 25,000, meaning it’s more
likely that 281,000 jobs were added to the US economy that month
rather than the 306,000 originally reported.
The BLS also benchmarks March payroll data in a more accurate report
that covers nonfarm employment called the Quarterly Census of
Employment and Wages (QCEW), which is based on state unemployment
insurance tax records.
Once March payroll figures are established, the change is
proportionally distributed across the prior 12 months.
The BLS’ first-quarter QCEW report will be released on Wednesday.
Despite expectations that the QCEW will show weaker payroll growth
figures, Silver said in his report that “the revised average monthly
rate of job growth would still look strong over the year through March
2023, at around 300,000.”
The figure, Silver noted, “would be trimmed down from the 337,000
average pace currently shown in the BLS data.”
Standard Charter Bank analyst Steven Englander estimates that the
downward revision could be even worse than Silver predicts, at around
650,000, according to Bloomberg.
That would indicate “a much weaker labor market profile” than what
guided Fed tightening in recent quarters, Englander told the outlet.
“This would reduce the pressure for further hikes.”
Bloomberg Economics’ Stuart Paul also believes the QCEW data will be
weaker than recent headlines suggest.
“People who have been outright saying ‘the labor market is tight’
might be in for a shock,” he told Bloomberg.
It’s the US job market’s supposed resilience that has played an
important role in the Fed’s decision to hike interest rates to a
22-year high last month, increasing the benchmark federal-funds rate
to a range between 5.25% and 5.5% in an effort to bring inflation back
down to its pre- pandemic level of 2%.
Fed officials have warned that strong hiring can often fuel inflation
if companies feel compelled to raise pay to attract and keep workers.
Thus, a slowdown in job growth and pay raises could help the Fed reach
its 2% inflation target.
When The Post sought comment from the BLS, a spokesperson declined to
comment on estimates, adding that they can only “answer questions
about published BLS data.”
https://nypost.com/2023/08/22/us-payroll-may-lose-500000-jobs-in-us-
government-data-revision/
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