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Tencent News "First Line" Ji Zhenyu

The U.S. Department of Labor released a report in the morning of August 21st, U.S. time, revising down the number of new jobs in the U.S. in the past year ending March this year by 818,000. This is also the largest downward revision of the employment report by the Department of Labor since 2009. The downward revision of this data means that the growth rate of new jobs in the United States in March 2024 will be reduced from 1.9% to 1.4%.

Every August, the U.S. Department of Labor adjusts the employment data released in the past year. This is because the employment report released each month is based on survey data of companies, and the adjusted data is calculated based on quarterly tax data. Therefore, there is usually a deviation between the initially released data and the adjusted data one year later.

According to the adjusted data, the average number of new jobs in the United States fell from 242,000 to 173,000 per month last year, which also means that the situation of the US job market is not as good as previous data showed.

From the perspective of specific industry sectors, the downward adjustment mainly came from the private sector, with a downward adjustment of 819,000 people, while the public sector saw an upward adjustment of 1,000 people. Among all private sectors, the professional and business services sector had the largest downward adjustment, reaching 358,000 people, accounting for almost half of the total downward adjustment in the private sector. In addition, the leisure and tourism industry also saw a significant downward adjustment, with new employment reduced by 150,000, and the new employment in the manufacturing industry was reduced by 115,000.

It should be pointed out that the data adjustment announced by the US Department of Labor on the same day is still not the final result, and the final value will be announced in February 2025.

Although this data has changed significantly, the market has basically digested this news in advance. Before the U.S. Department of Labor released the data, investment bank Goldman Sachs pointed out in a report that the Department of Labor is about to lower the data on the number of new jobs added last year, with a reduction of between 600,000 and 1 million.

Employment is one of the economic data that the Federal Reserve, the US monetary policy maker, focuses on, because maximizing employment is one of the dual responsibilities of the Federal Reserve. Federal Reserve Chairman Powell will deliver a speech at the Jackson Hole Central Bank Annual Meeting this weekend. Economists believe that changes in employment data may have an important impact on the Federal Reserve's next decision to relax monetary policy. At the Federal Reserve's monetary policy meeting at the end of July, the Federal Reserve almost clearly released a signal that it would make a decision to cut interest rates in September. The current mainstream view in the market is that the Federal Reserve will cut interest rates a total of three times this year.