Payrolls downward revisions of 818,000 fewer which would likely push the Fed interest rate to drop in September.

Payrolls downward revisions of 818,000 fewer jobs (an average of 68,167 fewer net jobs added per month) created between April 2023 and March 2024 put great pressure on the Fed to go down either 25 to 50 basis points on September 17th and 18th as the previous rosy picture of employment was overblown.

This will likely cause Powell to be less hawkish on the outlook and the Fed has to pivot speedier to ensure a soft landing instead of a recession.

Currently, there is a 69.5% likelihood of a 25 basis-points interest rate cut by the Fed in September, with a 30.5% chance of a super-sized 50 bps cut. It is 69.5% +30.5% = 100% of probable rate cut in September, and the revision should only increase the 50 bps of 30.5% even higher.

This is ahead of Chair Jerome Powell's speech at the Jackson Hole economic symposium on Friday

This revision should not spook the market as Goldman Sachs already expected 600,000 to 1 million fewer jobs created between April 2023 and March 2024.