US jobs stats cut stronger than expected. What does this mean for rates?

The U.S. labor market created far fewer jobs than previously estimated, revised data for the year ending March 2025 showed. Non-farm jobs fell by a revised 911,000. This was well above Wall Street expectations, which could give the Fed another reason to cut rates soon.

The number of jobs outside the U.S. agricultural sector fell by 911,000 from the initial result after revisions to data for the 12-month period ending March 2025. This was reported on Tuesday, September 9, by the U.S. Bureau of Labor Statistics. It takes into account data outside the agricultural sector. These figures are not final either - the final figures will be published in February 2026.

The 911,000 decline in the statistic is the largest since at least 2000, Bloomberg claimed. The result exceeded Wall Street's average expectations, which diverged from 600,000 to 1 million, CNBC noted.

The revision of labor market statistics is conducted every year, but this time it attracted special attention as investors are looking for signals that the labor market is slowing faster than previously expected, Bloomberg wrote. The sharp drop in data increases pressure on the Federal Reserve, which is expected to cut interest rates, the agency said.

Traders have little doubt that the U.S. Federal Reserve will cut the rate at the meeting on September 16-17. The probability of a 25-basis-point cut is estimated at 92.1%, a 50-bp cut at once at 7.9%, CME Group's FedWatch Tool shows. - 7.9%, the CME Group's FedWatch Tool shows.

But at the same time, the revised data reinforce doubts about the state of the economy and the quality of statistics collection, CNBC writes.

"Importantly, the slower pace of job creation implies that income growth has also been slower even before the recent increase in political uncertainty and the slowing economy we've seen since the spring. This should give the Fed additional impetus to resume its rate-cutting cycle," Nationwide Financial economist Oren Klatchkin said in a statement to the wire service.

Last week, the Bureau of Labor Statistics released statistics for August: U.S. employment grew by just 22,000 jobs - while the Wall Street consensus forecast was variously reported to be between 75,000 and 76,500. The unexpectedly weak data initially inspired the market, convincing it of the high probability of a rate cut soon.

However, optimism was soon replaced by caution: investors' fears of an economic slowdown became apparent. "It's simple: fewer full-fledged jobs - less spending - lower corporate profits," former JPMorgan strategist Marko Kolanovic explained at the time.

This article was AI-translated and verified by a human editor