The recent jobs report has raised eyebrows at the Federal Reserve, with Governor Lisa Cook voicing her worries about what it could mean for the U.S. economy.
Cook Sees Job Data Revisions As Sign Of Slowdown
Cook expressed apprehension about the July jobs report during a discussion with other Fed officials. She highlighted the substantial downward revisions to the job numbers for May and June, which she described as “typical of turning points” in the economy, CBS News reported.
The July report revealed that employers added only 73,000 jobs, a figure significantly below expectations. The Bureau of Labor Statistics (BLS) also revised its job estimates for May and June, indicating 258,000 fewer jobs than initially reported. These revisions, according to Cook, could indicate a shift in the U.S. economy.
“When we get the GDP numbers later this year, we’re going to see, I can imagine, lower activity,” stated Cook.
Despite the revisions being a regular feature of the BLS’s monthly jobs reports, Cook suggested that they reflect a slowdown in the U.S. economy and the uncertainty surrounding the Trump administration’s tariffs.
She also noted that the downward revisions to May and June’s hiring data were the most significant outside of a recession since 1968, according to an analysis by Goldman Sachs.
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Cook also underscored an “uncertainty tax” that she believes is impacting businesses across various sectors. She explained that executives are spending more time addressing macroeconomic uncertainty, including pricing strategies in anticipation of cost increases from new tariffs.
The latest jobs report and its revisions have sparked concerns about the U.S. economy. This comes in the wake of a weak July jobs report, which led to a shift in economists’ and markets’ stance on calling for lower interest rates.
The report also triggered a warning from Moody’s Chief Economist that the U.S. economy is on the brink of a recession. The July jobs report has also intensified the debate within the Fed over the urgency of rate cuts, with some of the most hawkish voices now advocating for a more dovish approach.
That being said, some Fed officials cautioned against reading too much into the July jobs report. Atlanta Fed President Raphael Bostic questioned whether the weak numbers were an anomaly or the start of a trend, emphasizing his continued confidence in the strength of the labor market.
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