The Bureau of Labor Statistics revised July and August payroll gains down by 60,000 on Oct. 2, turning July's reported 21,000-job gain into a 10,000-job loss. September payrolls grew by just 29,000, and cooler wage growth gives the Fed less reason to tighten further, even as inflation stays above target.
The Bureau of Labor Statistics revised July and August payroll gains down by 60,000 in its Oct. 2 release, weakening the labor-market case for another Federal Reserve rate hike. The revision does not reflect new September job losses — it corrects earlier estimates.
July's payroll count flipped from a 21,000-job gain to a 10,000-job loss, and August's estimate fell from 162,000 to 133,000. September itself added just 29,000 jobs.
Wage growth also cools
Average hourly earnings for private nonfarm payrolls rose 0.1% for the month and 3.0% annually, below the 0.3% and 3.1% originally reported for August. Weaker hiring and slower wage growth give policymakers less reason to tighten further to cool labor demand.
The data follow the Fed's Sept. 16 quarter-point hike to a 3.75%-4% target range. The central bank's statement at the time said job gains had kept pace with the workforce and that inflation remained elevated. Friday's release gives policymakers a softer payroll picture than those earlier estimates suggested.
Inflation still gives the Fed reason to consider further tightening. August core PCE inflation ran at 3.0%, with the headline figure at 3.4% annually — both above the Fed's 2% target.
Bitcoin's muted rate sensitivity
A softer labor market could ease one source of pressure on Bitcoin by reducing the threat of higher discount rates on speculative assets. However, a New York Fed staff study from February 2023 found Bitcoin largely unresponsive to monetary and macroeconomic surprises in an intraday event study.
Household survey tells a different story
The separate household survey showed employment rising by an estimated 406,000, with labor-force participation moving from 61.6% to 61.8% and unemployment edging up from 4.1% to 4.2%. The labor force grew by 485,000, allowing employment and unemployment to rise together.
Payrolls count jobs, while the household survey counts people and includes workers payroll data excludes. September's changes in both surveys fell below the BLS's approximate significance thresholds — 650,000 for the household survey and 122,000 for payrolls.
The mixed report limits both a recession call and a claim of a decisive hiring rebound. Stronger inflation or hiring data could change that reading before the next jobs release, scheduled for Nov. 6.
Source: U.S. Bureau of Labor Statistics
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