Largest Downward Revision Since 2002
The U.S. labor market created far fewer jobs than initially reported, according to a Bureau of Labor Statistics (BLS) revision released Tuesday. Annual adjustments to nonfarm payrolls showed a reduction of 911,000 jobs for the year ending March 2025, the steepest revision on record since 2002. Wall Street had anticipated a large correction, but the final figure came in near the top of estimates, which ranged from 600,000 to one million. On average, job growth was 76,000 lower per month than previously reported, suggesting a weaker employment picture throughout 2024 and early 2025.
Sectors Hit Hardest
The largest markdowns occurred in leisure and hospitality, which lost 176,000 jobs, followed by professional and business services with a decline of 158,000 and retail trade with 126,200 fewer positions. Most industries saw downward revisions, though transportation, warehousing, and utilities posted small gains. Nearly all adjustments were in the private sector, with government payrolls reduced by 31,000. Analysts noted that weaker job creation implies slower income growth, placing additional strain on consumer demand and overall economic momentum.
Political and Economic Ramifications
The revisions cover data from as far back as early 2024, before President Donald Trump took office. Still, they add weight to his administration’s criticism of federal data collection. Following July’s weak jobs report, which already contained significant revisions, Trump dismissed BLS Commissioner Erika McEntarfer and nominated Heritage Foundation economist E.J. Antoni as her replacement. White House press secretary Karoline Leavitt framed Tuesday’s report as evidence of the need for reform, declaring that “Biden’s economy was a disaster and the BLS is broken.”
Market and Fed Reactions
Financial markets showed limited immediate reaction. Stocks were little changed, but Treasury yields erased earlier losses and ticked higher. Economists, however, see broader implications. With payroll growth averaging just 29,000 per month over the summer, well below the level needed to hold the unemployment rate steady, pressure is mounting on the Federal Reserve to cut interest rates. The White House underscored this position, stating that Fed Chair Jerome Powell “has officially run out of excuses and must cut the rates now.”
Revisions Highlight Data Challenges
The benchmark revision process differs from monthly adjustments, as it draws on comprehensive data from the Quarterly Census of Employment and Wages and tax filings. While the current revision is preliminary, a final update will be issued in February 2026. Last year’s revision initially cut 818,000 jobs before being finalized at 598,000. The current 0.6% downward adjustment of the labor force may seem modest statistically, but the scale of the change raises concerns about both the accuracy of employment data and the trajectory of the U.S. labor market heading into 2026.