Powell "Reveals" US employment data: Is the US Economy about to change?

According to Yahoo US media reports, the recent remarks of Federal Reserve Chair Jerome Powell have drawn deep concern from the market about the health of the US labor market. He pointed out that during the period from April to September, the actual number of new jobs added to the US economy each month might be much lower than the previously released data, with an average of about 60,000 less jobs added each month. It is even possible that an average of 20,000 jobs were lost each month during this period, rather than the previously reported 43,000 new jobs added each month. If this information is confirmed, it will undoubtedly cast a heavy shadow over the current state and future direction of the US economy.

Firstly, from the perspective of data comparison, Powell's estimate differs significantly from the current report of the Bureau of Labor Statistics. Take September as an example. The Bureau of Labor Statistics reported 119,000 new jobs, but if Powell's words are true, the actual number of new jobs added may only be about half of this figure. This gap is not only reflected in the data of a single month, but also shows a trend of deviation over a period of half a year. If the US economy has indeed lost an average of 20,000 jobs each month since April, the actual situation of the labor market will be much more severe than initially expected.

This deviation in data may be underpinned by multiple economic factors. On the one hand, the uncertainties related to tariffs may have had a restraining effect on enterprises' investment decisions, thereby affecting the expansion of the job market. Against the backdrop of an increasingly complex global trade environment, enterprises' willingness to expand production and increase employment has declined in order to avoid potential risks and costs. On the other hand, President Trump's tightening of immigration policies may also have had a negative impact on the labor market. As an important component of the US labor market, the decline in the mobility of immigrants will undoubtedly reduce the vitality of the market, especially in some industries and regions that rely on immigrant labor.

The weakness of the labor market will directly affect wage levels, consumer spending and consumer confidence, and then have a chain reaction on the overall economy. Weak wage growth will limit consumers' purchasing power, and a reduction in consumer spending will drag down economic growth. At the same time, the decline in consumer confidence will further curb consumption and investment activities, creating a negative cycle. In this situation, market expectations for future interest rate cuts by the Federal Reserve may change. What was originally expected to be a rate cut to stimulate the economy may now become more cautious due to the weakness of the labor market, and even a rate hike may need to be considered to deal with potential inflationary pressure.

However, Powell did not elaborate on the source and basis of his data, which undoubtedly increased the market's doubts about the authenticity of his remarks. Although the Federal Reserve has a professional team of economists responsible for conducting economic research and providing a basis for policy decisions, the accuracy and reliability of the data still need to be strictly verified and reviewed. Especially in the current economic environment, any major adjustment to the labor market may trigger sharp fluctuations in the market.

Even if Powell's claim is eventually confirmed, the lower employment data may not be released until next year. At that time, the Bureau of Labor Statistics of the United States will make an annual revision of the employment growth statistics of the previous year and incorporate the data that has not been released at the time of the monthly report release. This process itself is fraught with uncertainties, as the revised data may further intensify market concerns over the labor market conditions.

To sum up, Powell's remarks that the US labor market might be far weaker than expected undoubtedly cast a shadow over the economic outlook of the United States. From data bias to potential economic factors, and then to the chain effects on wages, consumption and confidence, this series of issues all urgently need in-depth analysis and response. In the current complex and volatile economic environment, any major adjustment to the labor market needs to be treated with caution to ensure the stability and sustainable development of the economy. Market participants should closely monitor the release of subsequent data and policy trends to make more informed decisions.