Bloomberg Daybreak: US Edition Instant Reaction: US Payrolls Marked Down a Record 911,000 in Preliminary Estimate
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Sep 9, 2025 The US saw a stunning payroll drop of 911,000, triggering discussions about its impact on the economy and the Federal Reserve's interest rate decisions. Experts analyze how this revision affects perceptions of job growth and potential changes in the bond market. The discussion also covers fluctuations in US Treasury yields linked to these payroll adjustments. Additionally, rising oil prices due to geopolitical tensions and inflation worries loom large, with upcoming CPI and PPI reports expected to provide further insights.
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Revision Implies Softer Labor Market
- The preliminary benchmark revision showed much weaker employment growth than previously reported, signaling a softer labor market.
- Ira Jersey says this increases the likelihood the Fed will cut rates starting next meeting and possibly follow with multiple cuts.
Treat 25bps As The Base Case
- Expect a cautious 25 basis point Fed cut as the base case rather than an immediate large cut.
- Watch the Fed's guidance and updated dot plot to assess the pace and size of follow-on cuts.
Revisions Are Backward Looking, Not Destiny
- Revisions reflect past data and don't fully determine future economic trajectory, though they reveal trend direction.
- Jersey cautions long-end yields may consolidate after a rapid rally despite forecasts for sub-4% 10-year yields by year-end.