Revised job numbers raise new concerns about economic slowdown

New data reveals the U.S. job market was significantly weaker than previously reported, with over 900,000 fewer jobs added in the years ending March 2025 than anticipated. This represents the largest revision on record, stemming from a normal annual benchmarking process of employment data. The downward revisions were concentrated in sectors like leisure and hospitality, retail, and wholesale trade, areas often characterized by small firms and fluctuating employment.

These revisions suggest the economic slowdown began earlier and was more severe than initially understood. Factors like a major swing in immigration, from net gains to net losses, are considered contributing elements to the revised job creation figures, which now appear to be around 70,000 jobs per month. This economic softening is expected to influence the Federal Reserve's decision to lower interest rates, despite ongoing inflation concerns.

Accusations of political bias against the Bureau of Labor Statistics are deemed unfounded by experts. The institution's statisticians are described as dedicated public servants working diligently to maintain data quality despite budget constraints. The complexity of measuring a dynamic economy like the U.S. is highlighted, with suggestions for improved funding to better meet measurement challenges.

• The U.S. job market added over 900,000 fewer jobs in the years ending March 2025 than initially reported.
• This represents the largest downward revision on record, a normal annual process for employment data.
• Revisions were concentrated in leisure and hospitality, retail, and wholesale trade sectors.
• A significant swing in immigration from gains to losses is a contributing factor to the revised job figures.
• Experts defend the Bureau of Labor Statistics, calling accusations of political bias unfounded and suggesting better funding to improve data measurement.

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Job Market Revisions [00:05]

• New data indicates the U.S. job market was much weaker than initially reported for much of last year and this year.
• Over 900,000 fewer jobs were added in the years ending March 2025 than previously expected.
• These revisions are part of a normal annual process where the Bureau of Labor Statistics benchmarks its data.
• This year's change is the biggest revision on record.
• The revisions come after a weaker-than-expected monthly jobs report that led to the firing of the BLS commissioner.

This section discusses the significant downward revisions to U.S. job creation figures, highlighting the magnitude of the change and its context within the annual data adjustment process.

The viewer of laborers to to to issues these revisions every year, that this year's change is the biggest revision on record.

Factors Driving Weakness [00:47]

• The labor market softening was known, but these revisions suggest the slowdown started earlier and was more severe than previously thought.
• The Bureau of Labor Statistics provides a timely monthly measure of jobs based on a sample of firms, and a more comprehensive quarterly census with a lag.
• A downward revision was anticipated due to some quarterly data and the annual benchmarking process.
• Numbers were known to be a bit overstated.
• A major swing in immigration, from hundreds of thousands of new people entering the labor market to losing immigrants on balance, is a contributing factor.
• This immigration swing is linked to the shift from several hundred jobs being created monthly to an estimated 70,000 jobs created per month in the year ending March.

This part of the discussion explains why the revisions were expected and identifies key economic factors, particularly shifts in immigration, that contributed to the significant difference in reported job creation numbers.

I think that is one contributing factor to the big swing from several hundred jobs being created every month, to what now looks like more like 70,000 jobs created every month in the year ending in March.

Data Measurement Challenges [02:07]

• The quarterly census of employment, based on administrative data, is a more comprehensive measure covering almost every worker.
• While this census shows how many people are working, real-time data is needed, leading to the monthly jobs report.
• The quarterly data revealed that monthly payroll numbers were stronger than the quarterly data suggested.
• Other measures like ADP private payrolls and independent data metrics also provide insights.
• The unemployment rate is a separate measure not affected by this benchmark revision and is considered the best measure of weakness in the labor market.
• Despite smaller job creation over the prior year, the unemployment rate remained low.

This segment clarifies the difference between the monthly job reports and the more comprehensive quarterly data, explaining how discrepancies arise and how the unemployment rate serves as an independent indicator of labor market health.

We do know how many people are working, but we want to know in real time so we have a monthly jobs report and we can see as the quarterly data came in, that the payroll numbers that we look at every month were a little bit stronger than each month than what the quarterly data suggested.

Sectors Affected by Revisions [03:30]

• Most of the downward revisions occurred in the private sector.
• These revisions were concentrated in leisure and hospitality, and retail.
• Some revisions were also seen in wholesale trade.
• Sectors with large downward revisions were few but significant.
• Leisure and hospitality can be hard to measure due to small firms and seasonal/part-time employment.

This topic focuses on identifying which specific industries experienced the most significant job number adjustments and offers reasons why these sectors might be more prone to measurement challenges.

Most of the downward revisions came to the private sector and they were concentrated in leisure and hospitality, and retail, and some in wholesale trade as well.

Economic Slowdown Confirmation [04:04]

• A prominent CEO stated that the revised data confirms the U.S. economy is slowing.
• This confirmation aligns with existing expectations about the economy's trajectory.
• Experts agree that the combination of recent data indicates an economic slowdown.
• This slowdown is anticipated to lead the Federal Reserve to lower interest rates.
• The Federal Reserve is expected to conclude the economy is slowing when it meets next week and decide to lower interest rates slightly.
• Challenges remain, including the persistence of higher inflation.

This section bridges the discussion of job market data to broader economic sentiment, including the expectation of interest rate adjustments by the Federal Reserve in response to the observed slowdown.

I think the combination of the data we are seeing does confirm the economy slowing.

Political Pressure on BLS [05:13]

• The White House has characterized the revised data as proof of a failed economy under previous leadership and labeled the Bureau of Labor Statistics as "broken."
• There is significant political pressure on the BLS, an institution meant to be independent.
• Accusations of bias are considered completely unfounded by those familiar with the BLS.
• Statisticians at the BLS are described as dedicated public servants with decades of experience.
• There is no evidence of political bias within the agency.
• The BLS works hard to maintain high data quality even as its budget is cut.
• The complexity of measuring the dynamic U.S. economy is a challenge.
• Suggestions are made to consider better funding for the BLS to help them meet these measurement challenges.

This final segment addresses the political response to the data revisions, defending the integrity and operational capacity of the Bureau of Labor Statistics against what is described as unfounded criticism, and proposing increased funding as a solution to measurement difficulties.

I have worked with the statisticians at the BLS for decades. They are dedicated public servants. There's no evidence of political bias.