Predictions for September: Will the Fed Chair Signal Rate Cuts After Jobs Report Revisions?
As summer winds down and September approaches, all eyes are on the Federal Reserve and its Chair, Jerome Powell. The big question on everyone’s mind: Will the Fed finally signal a rate cut? To predict what might be coming, it’s essential to look at the recent jobs report revisions—especially those that have become a hallmark of the Biden presidency.
Understanding the Jobs Report Revisions
Every month, the U.S. Labor Department releases its jobs report, a snapshot of how many jobs were added or lost and what’s happening with unemployment. But here’s the twist: those numbers often get revised in the following months. Under President Biden, we’ve seen a pattern of initial jobs numbers being revised downward—a detail that hasn’t gone unnoticed by Wall Street or the Fed.
- Why do revisions matter? They reveal the true strength (or weakness) of the labor market, sometimes painting a less rosy picture than the first headlines suggest.
- Recent trends: In 2024, several reports initially showed robust job growth, only to be quietly revised lower later. This has made the Fed’s job even trickier—how do you set policy when the data keeps changing?
How Revisions Influence the Fed’s Thinking
The Fed’s main job is to balance inflation and employment. When jobs growth looks strong, the Fed tends to keep rates steady or even raise them to keep inflation in check. But if job growth is weaker than it appears—thanks to those downward revisions—the case for a rate cut gets stronger.
Powell and his colleagues have repeatedly said they’re “data dependent.” That means every revision, every updated number, is under the microscope. If the revised data shows a cooling labor market, expect the Fed to talk more openly about easing up on rates.
What to Watch for in September
As the September Fed meeting approaches, here are a few things to keep an eye on:
- Fed Chair’s language: Listen for subtle shifts in how Powell talks about the labor market. Words like “softening” or “moderation” could be clues.
- Market reaction: Investors are already betting on a rate cut. If the Fed signals it’s coming, expect a rally in stocks and bonds.
- Political backdrop: With the presidential election heating up, every economic indicator is under extra scrutiny. The Fed will want to appear independent, but the pressure is on.
The Bottom Line
While no one can predict the future with absolute certainty, the pattern of downward jobs report revisions during the Biden presidency is tilting the odds toward a rate cut sooner rather than later. If September’s data continues this trend, don’t be surprised if the Fed Chair finally gives the green light for lower rates—something both Wall Street and Main Street have been waiting for.
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Chad Behnken
Luxury Real Estate Advisor
Licensed in CO and GA
Engel & Völkers Pikes Peak
chad.behnken@engelvoelkers.com
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