US Payrolls Revised Down 79,000, Undercutting September Hike Case

The Labor Department trimmed its estimate of US payrolls through March by 79,000 jobs, against a consensus forecast for a 183,000 gain.

The preliminary benchmark revision cut US nonfarm payrolls by 79,000 jobs through March 2026, against a median economist forecast for a 183,000 increase, complicating the Federal Reserve's case for a September rate hike.

"Today, the peso cedes ground to a firm dollar, in line with a retreat among most emerging-market currencies, stemming from reduced risk appetite among investors," said Janneth Quiroz Zamora, director of economic, foreign exchange and equity analysis at Grupo Financiero Monex.

The downward adjustment contrasts with last year's preliminary revision, which found payrolls overstated by 898,000 jobs, and with the final 2025 benchmark figure of minus 862,000. The revision compares the monthly establishment survey, based on a sample of roughly 141,000 businesses, against the more complete universe of unemployment insurance tax records. The final benchmark revision will be published in February alongside the January 2027 employment report.

The data lands hours before Fed Chair Kevin Warsh's Jackson Hole keynote, with markets pricing renewed odds of a September 16 hike after July PCE held at 3.7 percent year over year and jobless claims fell to 203,000. A smaller-than-expected downward revision leaves the hawks' argument intact, while a larger cut would reframe the labor market as weaker than monthly reports suggest.

The Revision's Cross-Asset Reach

The peso retreated to 16.99 per dollar Thursday, a one-week high for the greenback, snapping a five-week run of peso appreciation that had briefly pushed USD/MXN below 16.88. The move came as investors absorbed the PCE print and jobless claims report, both pointing to a US economy too strong for the Fed to abandon its optionality on a September increase. The carry trade underpinning the peso's two-year recovery rests on Banxico's 6.50 percent rate sitting roughly 275 basis points above the Fed's 3.50-3.75 percent target range, a spread that a hike would compress by a quarter point.

The benchmark revision adds a second variable to that calculus. Last year's preliminary adjustment of minus 898,000 jobs was followed by a final figure of minus 862,000, a gap that shows how much the monthly establishment survey can overstate hiring during periods of rapid immigration-driven labor supply growth. If Friday's preliminary figure widens toward a similar scale, it would undercut the hawkish reading of the recent claims data and give Warsh cover to hold rates steady.

What Friday's Data Means for the Fed

The benchmark revision arrives alongside Warsh's keynote at approximately 10:00 a.m. ET Friday. Cleveland Fed President Beth Hammack, one of three officials who dissented in favor of an immediate hike at the July 29 FOMC meeting, said Thursday that "now is the time to act." Chicago Fed President Austan Goolsbee said his "biggest fear in the short run continues to be that inflation is not under control," citing rising energy costs tied to the US-Iran conflict and tariff policy as supply-side pressures the Fed cannot address with rates alone.

For the peso, the outcome hinges on how the two releases interact. A hawkish Warsh who endorses the September case, combined with a benchmark revision that leaves the labor market reading unchanged, would likely push USD/MXN back toward and possibly above 17.35. A neutral message that restores the September-hold baseline, combined with a large downward payroll revision, could send the pair back toward its recent low near 16.88. Either outcome lands while roughly 83,700 speculative long peso contracts sit crowded in the carry trade, a positioning that makes any directional shift self-reinforcing as stop-losses cascade.

This article is for informational purposes only and does not constitute investment advice.