Powell Flags Risk That Job Growth Is Overstated

Benzinga

Powell said official data may be overstating job creation by as much as 60,000 per month, implying the economy could actually be losing jobs. The concern contributed to a third straight rate cut as the Fed weighs flawed labor data, inflation, and rising unemployment.

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00:00It's Benzinga, bringing Wall Street to Main Street.

00:03The Federal Reserve said Wednesday that hiring may be far weaker than official data suggests,

00:08according to the Wall Street Journal.

00:10Fed Chair

00:11Jerome Powell said staff analysis indicates federal statistics may be overstating monthly

00:16job creation by up to 60,000 positions. Published figures show the economy added about 40,000 jobs

00:23a month since April, which Powell said could imply an actual loss of roughly 20,000 jobs.

00:29He said the concern contributed to the Fed's decision to cut interest rates for the third

00:33straight meeting. The Bureau of Labor Statistics birth-death model, which estimates jobs created

00:39or lost when businesses open or close, has overstated employment in recent years and produced

00:44large downward revisions. The agency plans methodological changes in February, but Powell

00:50said current data may still be too optimistic as the Fed navigates inflation and rising unemployment.

00:57The Labor Department has faced survey response issues, budget constraints, and delays from

01:02the recent government shutdown. For all things money, visit Benzinga.com.

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