The latest jobs report points to a labor market that’s faltering, but the slowdown may have begun much earlier. Economists expect the Bureau of Labor Statistics tomorrow to issue a major downward revision, showing the nation added hundreds of thousands fewer jobs than first reported.
On Sept. 9, the BLS will release its preliminary benchmark revision to labor market data, which aims to better account for businesses that have opened or closed. Economists say the revision, covering the 12-month period through March 2025, could show that hiring during that time was about 800,000 jobs lower than previously reported.
The report could draw attention from the Trump administration, as the president last month questioned the validity of the monthly jobs report — and fired the commissioner of the BLS — after the data included a significant downward revision. Hiring experts and economists point to a job market that’s stalling out as some businesses are bearing increased tariff costs while others are tapping artificial intelligence as a way to lower labor costs and replace workers.
“The labor market will likely look even worse after the release of the preliminary benchmark revision to payrolls on Sept. 9,” Bill Adams, chief economist for Comerica Bank, noted in an email.
The revision could show that employment was reduced by about 775,000 for the 12 months through March, Adams estimated. That would indicate that the average monthly job growth in 2024 actually stood at 100,000 per month, down from the 165,000 previously reported, he added.
The revision would cover only the first three months of Mr. Trump’s second administration, with the bulk of the timeframe occurring in the last year of former President Biden’s administration.
Job growth has slowed dramatically in recent months, with the employers adding an average of 29,000 jobs each month from June through August, the most recent BLS data shows.
Why does the government revise its jobs data?
Jobs revisions occur each month, with the BLS updating its data to reflect more recent information it has received from businesses about the pace of hiring. That’s because some companies respond late to the BLS’ surveys, which means the agency receives an influx of new information after it has issued its initial monthly jobs report, prompting the fresh numbers.
But once a year, the BLS also issues an annual revision based on fresh data from the Quarterly Census of Employment and Wages (QCEW), which tracks employment and wages reported by employers that cover more than 95% of U.S. jobs.
While the monthly jobs report relies on about 50,000 responses for each period, the QCEW covers 11 million workplaces — but that scope requires more time for collecting the data versus the BLS’ monthly report, Adams of Comerica said.
“The QCEW’s detail lets it directly measure jobs added at newly-opened workplaces and lost at closing ones, which account for several millions of employment churn each year,” he added.
What happened in the last annual revision?
The BLS issued a major downward revision last year for the same annual data, showing that employers added 818,000 fewer jobs in the 12 months ended March 2024 than previously estimated. That lowered average monthly job growth for the period to 174,000, down from the initial estimate of 242,000.
At the time, the downward revision was seen as evidence that the labor market was showing cracks, and it was viewed as paving the way for the Federal Reserve to cut rates at its September 2024 meeting.
What does this mean for a Fed rate cut?
The Fed will be focused on analyzing recent economic data, such as the latest jobs report and the next Consumer Price Index, which will be issued on Sept. 11. Economists expect the CPI to show an annualized increase of 2.9% in August, higher than the prior month’s 2.7% and well above the Fed’s goal of reaching a 2% annual rate.
With the labor market hitting a wall in recent months, economists now expect the Federal Reserve to cut its benchmark rate at its Sept. 17 meeting. The only question is whether the Fed might usher in a jumbo cut of 0.5 percentage points, or opt for the typical cut of 0.25 percentage points.
“Market odds currently see a 100% chance of a Fed rate cut this month, with a small constituent seeing an outsized 50-basis-point cut on Sept. 17 within the realm of possibility,” Anthony Saglimbene, Ameriprise chief market strategist, wrote in a Sept. 8 research note.
But, he added, if the August’s Consumer Price Index comes in hotter than expected on Sept. 11, that “would likely throw cold water on the idea that the Fed is considering an outsized September rate cut.”
President Trump has repeatedly lashed out at Powell this year over the Fed’s decision to keep interest rates level. In June, Mr. Trump publicly mused over whether to fire him, although many legal experts say it’s not clear he has the constitutional authority to do so. Powell’s term as Fed chair ends on May 15, 2026.
Trump nominates replacement commissioner
President Trump in August announced E.J. Antoni as his nominee to lead the Bureau of Labor Statistics on Monday. Antoni, a fellow at conservative think tank the Heritage Foundation, has criticized the BLS, questioning its methodology.
“DOGE needs to take a chainsaw to the BLS…,” he wrote in a November post on X.
In a statement Monday backing the BLS, the National Association for Business Economics (NABE), a professional association of global economists, applied economists, data scientists and academics, said it “stands firmly with the dedicated economists and statisticians at BLS and across the federal statistical agencies.”
The association went on to urge policymakers and others in the business and economics community “to defend the integrity of the U.S. statistical system and ensure it remains the global gold standard,” it said.
“The Bureau of Labor Statistics needs a knowledgeable and qualified commissioner who will uphold the agency’s mission and protect its trusted professional staff from political pressure. A commissioner with deep expertise and independence is essential to maintaining public trust, ensuring impartial analysis, and safeguarding the credibility of U.S. statistics,” NABE added.
