The largest annual revisions on record should push the Federal Reserve to cut interest rates, experts said.
The U.S. labor market has been weaker than initially reported over the past year, according to updated Bureau of Labor Statistics data released on Sept. 9.
The federal agency published preliminary annual revisions to its nonfarm payroll data after gathering more comprehensive employment information.
For the third consecutive year, annual job growth was cooler than first estimated.
Job Growth Overstated
For the year ending in March, the U.S. economy added 911,000 fewer jobs than the Bureau of Labor Statistics initially estimated, marking the largest annual revision to national employment data on record.
This represents a 37 percent decline from the bureau’s original estimate of approximately 2.4 million new jobs last year.
It also accounts for a 0.6 percent share of overall employment, which is higher than the 10-year average for annual revisions of 0.2 percent.
The private sector accounted for virtually all of the downward revisions, totaling 880,000.
This was led by leisure and hospitality (down 176,000), professional and business services (minus 158,000), retail (down 126,200), and wholesale trade (minus 110,300).
Transportation, warehousing, and utilities were the only two sectors to see upward changes: 6,600 and 3,700, respectively.
Government payrolls were adjusted lower by 31,000.
The bureau will publish the final annual benchmark revisions in February 2026.
3 Years of Downward Revisions
Before revisions, monthly payroll gains averaged 146,500 during this span. Following these updates, the per-month average will be approximately 70,500.
Similar changes were observed in the previous two years.
In last year’s report, the bureau revised job growth lower by 818,000, or 30 percent, in the 12 months through March 2024.
This reduced the final tally to around 2.1 million from 2.9 million and altered the average monthly employment gain to 174,000 from the initial estimate of 242,000.
Likewise, the preliminary benchmark payrolls revision for March 2022 to March 2023 highlighted 306,000 fewer jobs—a 7.5 percent reduction in reported job growth.
Still, the U.S. economy added about 3.7 million jobs in those 12 months, although many of the gains were recouped from the pandemic.
By Andrew Moran
