U.S. Job Market Shock: 1.2 Million Jobs Lost, Mounting Pressure on Fed to Cut Rates

U.S. Job Market Shock: 1.2 Million Jobs Lost, Mounting Pressure on Fed to Cut Rates

Washington — U.S. job numbers were sharply revised downward, showing a loss of 1.2 million jobs over the past 16 months, far worse than previously reported. The alarming data signals a much weaker labor market and intensifies pressure on the Federal Reserve to cut interest rates at the upcoming FOMC meeting on September 17–18.

The Bureau of Labor Statistics (BLS) revealed that earlier figures had overstated employment by 911,000 jobs, but the true shortfall now stands at about 1.2 million. Economists warn this underscores a labor market that has virtually stalled, raising urgent concerns about economic momentum.

Citi’s Andrew Hollenhorst noted that had the Fed known this data earlier, rate cuts would have already been underway. He emphasized the shocking drop is enough reason for the Fed to consider a 0.5% rate cut, though Fed Chair Jerome Powell may opt for a more cautious 0.25% cut while signaling further easing ahead to build consensus.

According to the CME FedWatch Tool, investors are now almost 100% certain the Fed will cut rates next week, with expectations of up to three consecutive cuts through year-end.

At the same time, analysts urge the U.S. and China to finalize a trade agreement to restore business confidence, encourage investment, and revive hiring momentum.