Photo by Colleen Michaels/Deposit Photos
The Commerce Department significantly revised economic growth downward, dropping last quarter’s Gross Domestic Product by three-tenths of a point from 2.4% to 2.1%. This downgrade marks several months this year, that the department has had to revise their previous claims.
Alfredo Ortiz, the head of the Job Creators Network, small business lobby, is concerned about the direction the data points to.
“The labor force participation rate is the story there. I think it’s really because people really are running out of money basically to afford living,” said Ortiz.
“So overall, I think people are getting concerned. Employers are starting to kind of put a hold on their hiring practices. They’re not necessarily letting people go, but they’re also not bringing people in. And so that is all a concern. The trends, I don’t think are necessarily being shown in the first release of the estimates,” he added.
Since January, the Labor Department has overestimated seasonally adjusted job growth. The agency initially said the U.S. added 517,000 jobs from December to January, but later revised that number to 472,000, reflecting an overestimate of 45,000.
So far this year, the Labor Department has overestimated job growth by 325,000, according to the latest data available, which focuses on growth from January through June.
In June the Labor Department initally said the U.S. gained 209,000 new jobs but later slashed that number in half.
Last week, ADP, who has traditionally been seen as a signal of what the Department of Labor’s monthly jobs report will show, reported that private employers added 177,000 jobs in August, well below the revised total of 371,000 added in July. Economists surveyed by Dow Jones were expecting 200,000 jobs added in August. Official numbers released Friday did show that 187,000 jobs ended up being created in August.
The unemployment rate also grew to 3.8% in August from 3.5% in July, per the Labor Department.
