America’s strong labor market might be somewhat weaker than anticipated.
As Bloomberg News reported Tuesday (Aug. 22), government data released this week logging payroll growth for the year through March will include a revision that will likely subtract around 500,000 jobs from the total employment levels.
Still, the report said, average job growth would remain strong, at roughly 300,000 payrolls per month, a number that wouldn’t lead economists to change their minds about the strength of the U.S. jobs market.
“While we expect the BLS preliminary estimates to indicate that payroll growth has not been as strong as initially reported, revisions are not likely to be so large as to suggest a meaningful shift in labor market conditions,” said Oscar Munoz, chief U.S. macro strategist for TD Securities.
The Bureau of Labor Statistics (BLS) releases payroll estimates each month, based on figures from an array of industries, the report notes, adjusting the previous two months as new information comes in.
But once a year, the BLS also adjusts the March payroll numbers to a more accurate figure, known as the Quarterly Census of Employment and Wages, which is based on state unemployment insurance tax records and covers almost every job in the country.
For the past several months, economists have been calling the labor market strong, but the Bloomberg report quotes a number of analysts who say this revision might show the job market weaker than expected, reducing the threat of interest rate hikes.
Meanwhile, data published earlier this month by the ADP Research Institute showed wage growth slowing, with U.S. workers seeing a 6.2% pay increase compared to July of last year, the slowest increase since November 2021. For workers who changed jobs, the median pay increase was 10.2%, another two-year low.
“The economy is doing better than expected and a healthy labor market continues to support household spending,” Nela Richardson, ADP’s chief economist, said in a news release. “We continue to see a slowdown in pay growth without broad-based job loss.”
Earlier this summer, PYMNTS noted figures from the government that showed people’s work hours were falling, along with their take-home pay.
“Altogether, while jobless numbers seem to be inching up, the combined slowdown of hours and real earnings may be raising the rates of economic insecurity among consumers across the country,” PYMNTS wrote.