U.S. Job Gains 'Halved'…"The Economy Is Weakening"

910,000 Downward Revision…Largest Adjustment

"91.7% Probability of a Rate Cut This Month"

The U.S. employment situation turned out to be much weaker than initially reported.

The U.S. Department of Labor said on the 9th (local time) that it had downwardly revised nonfarm payroll job gains from April last year through March this year by 911,000 compared with the figures previously released. This cuts more than half of the 1,790,000 increase recorded in the previous official statistics. Accordingly, the monthly average job gain for the period fell from 147,000 to 71,000. CNBC said this downward revision was the largest since 2002.

Revisions to employment statistics are a regular annual procedure. This adjustment newly included state government tax data that had not been reflected in the previous statistics. The figures released that day are also preliminary. The final confirmed figures will be released in February next year. By industry, the adjustments were notable in leisure, food and accommodation (-176,000) and professional and business services (-158,000).

Following July, Wall Street is paying attention to labor market trends as jobs declined by a larger-than-expected margin last month as well. Nonfarm payrolls in August increased by just 22,000 from the previous month. This figure fell far short of the Dow Jones-compiled experts' forecast (75,000). It was the lowest level since October last year. July was also roughly half of June's gain (144,000).

Jamie Dimon, CEO of JPMorgan, said in a CNBC interview that he "thinks the economy is weakening" in response to a question about the U.S. Department of Labor's downward revision of annual employment figures.

He said he expects the U.S. central bank (Fed) to "probably cut" its policy rate, but added that "it may not mean much for the economy as a whole."

As concerns over a deteriorating labor market grew, the market has effectively accepted a Fed rate cut this month as a given. According to the Chicago Mercantile Exchange (CME) FedWatch tool, the probability on that day of a 0.25% point cut in the September federal funds rate on the federal funds futures market was 91.7%.

Reporter Im Dayeon allopen@hankyung.com