On September 9, the Bureau of Labor Statistics (BLS) announced a preliminary benchmark revision, reducing reported U.S. job growth from April 2024 to March 2025 by 911,000, or about 76,000 fewer jobs per month.
This adjustment, based on comprehensive data from state unemployment insurance and the Quarterly Census of Employment and Wages (QCEW), reveals a labor market far less robust than initially estimated, with monthly job growth dropping from 147,000 to roughly 71,000.
The final revision will be confirmed in February 2026. The August 2025 jobs report added to concerns, showing only 22,000 jobs created, below the 75,000 expected, and a revised June figure indicating a loss of 13,000 jobs, the first monthly decline since December 2020.
The unemployment rate climbed to 4.3%, the highest since October 2021, with 7.24 million unemployed compared to 7.18 million job openings, a rare gap. Over the past three months, job growth averaged just 29,000 per month, down sharply from 2024’s 168,000 average. These figures suggest a labor market struggling to sustain momentum, raising questions about economic health.
Sector-Specific Declines and Contributing Factors
The revisions impacted several sectors, with leisure and hospitality losing 176,000 jobs, professional and business services 158,000, retail trade 126,000, and manufacturing 95,000.
Government jobs were revised down by 31,000, while transportation and warehousing saw minor gains. Manufacturing, a key focus of the Trump administration, shed 78,000 jobs over the year, including 12,000 in August.
Economists point to high interest rates, uncertainty from proposed tariffs, and stricter immigration policies as factors slowing labor force growth. Morgan Stanley analysts noted a “chilling effect” from immigration restrictions, while some attribute job cuts to increased use of automation and artificial intelligence.
Healthcare and social assistance showed resilience, adding 31,000 and 16,000 jobs in August, respectively, though below recent trends. The labor force participation rate remained at 62.3%, but long-term unemployment rose to 1.9 million, representing 25.7% of the unemployed. These trends indicate a labor market facing significant challenges, with businesses cautious amid economic and policy uncertainties.
Policy Implications and Federal Reserve Outlook
The revised data has intensified focus on the Federal Reserve’s upcoming September 16-17, meeting, where a quarter-point rate cut is anticipated, with potential further reductions in October and December.
Fed Chair Jerome Powell has cited labor market weakness as a priority, balancing it against a 2.9% annualized inflation rate in August, above the Fed’s 2% target. Proposed tariffs could further elevate prices, complicating monetary policy decisions. The revisions provide a critical data point for the Fed as it navigates supporting employment without exacerbating inflation.
The Trump administration has seized on the revisions to critique the BLS and its predecessor’s economic stewardship. Labor Secretary Lori Chavez-DeRemer stated, “Today’s massive downward revision gives the American people even more reason to doubt the integrity of data being published by BLS.”
The White House added, “This is exactly why we need new leadership to restore trust and confidence in the BLS’s data on behalf of the financial markets, businesses, policymakers, and families that rely on this data to make major decisions.” In August, Trump replaced BLS Commissioner Erika McEntarfer with E.J. Antoni, a Heritage Foundation economist critical of BLS methods, following a disappointing jobs report.
Context of Revisions and Political Scrutiny
BLS revisions are standard, reconciling initial estimates from a 100,000-employer survey with comprehensive QCEW data. The 2025 revision, at 0.6%, is notable but consistent with adjustments during economic transitions, such as the 589,000 downward revision for 2023-2024. Economists emphasize that revisions reflect data refinement, not misconduct, despite Trump’s claims that BLS figures were falsified to harm Republicans, assertions lacking evidence.
The dismissal of McEntarfer has raised concerns among experts, with the National Association of Business Economists advocating for increased BLS funding to enhance data accuracy and reduce revision margins. The controversy underscores the tension between statistical processes and political narratives, with the labor market’s trajectory remaining a key focus for policymakers and analysts.
