US Jobs Data Revised Down 60,000, Undermining Basis for Fed Rate Hike

Jobs report correction casts doubt on Fed rate decision

The US Bureau of Labor Statistics has revised down its July and August employment figures by 60,000 jobs, stripping away the optimistic data that supported the Federal Reserve's interest rate hike on September 16.

July's originally reported gain of 21,000 jobs has been flipped to a loss of 10,000. The August estimate was cut by 29,000. The BLS said the changes reflect additional business and government reports plus seasonal recalculations.

Key figures from the revision

• July job gain revised from +21,000 to −10,000
• August job gain slashed by 29,000
• Total two-month downward revision: 60,000 jobs
• September added only 29,000 jobs against a forecast of 84,000
• Unemployment rate rose to 4.2%

What the Fed said versus what the data shows

On September 16, the Fed stated that "job gains have kept pace with the workforce, and the unemployment rate has changed little," and Fed governor Kevin Warsh told reporters that "job openings and weekly hours have been increasing." The Fed described the US economy as "largely acting consistent with full employment." That assessment was based on the earlier, now-revised data.

The October 2 BLS revision reveals the opposite picture for the two months prior to the rate decision.

Economists question whether a hike was warranted

UBS noted that the initially strong August report had already pushed market odds of a rate hike from 50% to 60%. After the revised numbers, Jefferies chief US economist downplayed the August figure, calling it "nothing more than a rebound from very weak hiring in June and July." Financial blogger ZeroHedge argued the Fed would not have hiked at all with accurate data in hand.

Following the September rate increase, 16 of 18 Federal Open Market Committee members expected another hike before year's end. That forecast is now under scrutiny.

Why this matters for crypto markets

The Fed's rate decision influences the broader financial environment for crypto assets. Higher interest rates make borrowing more expensive and can push investors toward safer, yield-bearing assets instead of riskier holdings like Bitcoin. If the revised jobs data suggests the economy is weaker than previously thought, it could reduce the likelihood of further rate hikes in the near term, which may ease pressure on crypto markets.

What is still unclear

It remains uncertain whether the FOMC will adjust its rate outlook given the revised data. No official statement has been issued by the Fed addressing the BLS revision as of publication.

Sources

• Protos

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