A Million Jobs Just Disappeared
What it means for mortgage rates, gold, and your portfolio
For months, investors were told the labor market was rock solid.
Turns out, the ground beneath our feet was softer than the headlines suggested.
The Bureau of Labor Statistics just pulled back the curtain, showing job growth was overstated by nearly a million positions over the past year. Pair that with sluggish summer hiring and it’s clear the job market isn’t the shield against recession many thought it was. The question now: what does this mean for mortgages, gold, and stocks?
This isn’t just a technical revision. It’s a signal that the Fed ,and by extension the Bank of Canada, will need to move faster and harder than expected.
And it will definitely impact your mortgage rate, gold, inflaiton and stocks.
A Million Jobs That Weren’t There
The BLS’s preliminary benchmark revision is the largest on record since 2000: 911,000 jobs erased from the tally covering the 12 months ending in March.
For context, that’s roughly the size of all the jobs in Delaware, Vermont, and Wyoming combined—gone with a spreadsheet adjustment.
Layer on fresh data showing just 22,000 jobs created in August, and June’s first net loss since the pandemic winter of 2020, and a clear picture emerges: the labor market is slowing, perhaps faster than policymakers hoped.
The Federal Reserve has already telegraphed a quarter-point rate cut next week. Now, with the job market weaker than the official record had implied, markets are betting those cuts won’t be a one-off.
Rate cycles tend to run in series, and this labor data hands the Fed a reason to err on the side of easing.
Falling Mortgage Rates: More Relief Ahead
For households, the most immediate impact will be on borrowing costs.
A softer labor market gives Central Banks cover to continue cutting, which in turn lowers yields on government bonds, the foundation of mortgage pricing.
Mortgage rates, which had already begun drifting down, are likely to fall further. For U.S. borrowers, that offers a bit of breathing room in an otherwise tight affordability environment. For Canadians, the implications are similar: the Bank of Canada has been wary of getting too far ahead of the Fed, but this revision provides political and economic cover to match U.S. easing.
Lower rates won’t erase years of affordability challenges overnight, but they could unlock pockets of housing demand as sidelined buyers find payments slipping back into reach.
Gold’s Dual Tailwind: Weak Jobs, Sticky Inflation
Gold thrives in two conditions: when inflation expectations rise, and when real interest rates fall. Today, investors are staring at both.
Inflation in the U.S. remains above target. Normally, that would keep rate cuts on hold. But with the labor market cracking, the Fed has no choice but to prioritize growth and jobs. That’s a recipe for looser money even as price pressures linger.
Translation: the path of least resistance for gold remains higher.
A weaker dollar, negative real rates, and the specter of renewed inflation combine into a supportive backdrop. For long-term holders, this looks less like a trade and more like a structural bull case.
Stocks: Gains With a Catch
Equities, too, are salivating over lower rates. Cheaper money props up valuations, fuels corporate borrowing, and makes stocks look more attractive relative to bonds. The S&P has already been pricing in a rate-cut cycle.
But here’s the catch: stocks love falling rates only as long as the labor market is slowing, not collapsing. The August payroll print of just 22,000 new jobs was weak but not disastrous. If revisions and future reports show accelerating job losses, markets may flip from cheering cuts to fearing recession.
Investors should brace for volatility. Tech and rate-sensitive sectors may continue to rally on cuts, but cyclical industries from industrials to consumer discretionary will be the first to show strain if unemployment accelerates.
The labor market is still the fulcrum: moderate weakness equals higher stock prices; sharp losses could drag indexes down.
The Bottom Line
The headline looks technical, just a revision to old data.
But in practice, it’s a warning shot. The labor market isn’t as resilient as it looked, and monetary policy will need to adjust. That means lower mortgages, stronger gold, and equity markets that rise or wobble depending on just how deep the job cuts go.
This time, the revisions matter.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Investors should conduct their own due diligence and consult with a financial advisor before making investment decisions.