Why 818,000 Fewer Jobs Signal a Healing Economy. Don’t Panic.
A year ago, commentators were concerned that payrolls were growing too fast, keeping inflation elevated. It turns out the labor market was just right.
The labor market isn’t too hot or too cold.
Photographer: Spencer Platt/Getty Images
There was a lot of commotion Wednesday about an obscure — at least to non-economists — labor data revision that, on the face of it, showed 818,000 fewer nonfarm jobs in America than previously thought. To put this annual exercise in context and allay some concerns, it’s helpful to roll back the clock for a moment to late spring of 2023.
A Bureau of Labor Statistics report had just shown that the US added an extraordinary 339,000 jobs to nonfarm payrolls in May, and members of the economics and markets commentariat were hysterical. Here’s what former Treasury Secretary Lawrence Summers said in an appearance on Bloomberg Television with David Westin, about how the Federal Reserve had to tighten monetary policy promptly: