Update on the labor market could shake stock prices

Despite the mainstream media's desperate attempts to convince everyone that the economy is improving, data keeps emerging that proves the opposite.

The latest? A report from the Bureau of Labor Statistics with preliminary revisions to employment data is expected to show a huge drop in the numbers. Goldman Sachs estimates that 600,000 to 1 million fewer jobs were created between April 2023 and March 2024.

According to the New York Post, if the correction were more than 501,000, it would be the largest reduction in the number of jobs.

“A sharp negative revision would imply that hiring momentum had already weakened before April,” Wells Fargo economists Sarah House and Aubrey Woessner said last week, according to the New York Post. This would “make the risks to the full employment side of the Fed's dual mandate even clearer given the general weakening of other labor market data.”

The leader of the free world may angrily insist that his economic policies are working, but that does not mean they are actually working.

Business Insider reports how the latest jobs data could cause unrest on Wall Street and elsewhere. Here's how the story begins:

An under-the-radar labor market update will be released on Wednesday that could cause turmoil at the Federal Reserve and stock markets this week.

The Bureau of Labor Statistics will release estimates for its preliminary benchmark revision of operating data for 2024 on Wednesday morning. The report will cover nonfarm payroll data from April 2023 to March 2024.

Goldman Sachs estimates that the report will likely include a significant downward revision to the 12-month employment growth forecast.

Goldman economist Ronnie Walker said the report could lead to a downward revision of employment growth by as many as one million jobs.

“Based on the Quarterly Employment and Wages Survey (QCEW) – the main data source for the annual benchmark revision – a large downward revision seems likely; we estimate it in the range of 600,000 to 1 million (or a downward revision in monthly wage growth of 50,000 to 85,000 over the April 2023-March 2024 period),” Walker said in a note last week.

Such a high figure would represent the largest downward revision in non-farm employment since 2010, he added.