Job growth revised down by 911,000 through March, signaling economy on shakier footing than realized

The labor market created far fewer jobs than previously thought, according to a Labor Department report Tuesday that added to concerns both about the health of the economy and the state of data collection.

Annual revisions to nonfarm payrolls data for the year prior to March 2025 showed a drop of 911,000 from the initial estimates, according to a preliminary report from the Bureau of Labor Statistics. The total revision was on the high end of Wall Street expectations, which ranged from a low around 600,000 to as many as a million.

The revisions were more than 50% higher than last year's adjustment and the largest on record going back to 2002. On a monthly basis, they suggest average job growth of 76,000 less than initially reported.

The numbers, which are adjusted from data in the quarterly census and reflect updated information on business openings and closings, add to evidence that the employment picture in the U.S. is weakening.

Most of the time span for the report came before President Donald Trump took office, indicating the jobs picture was deteriorating before he began levying tariffs against U.S. trading partners.

"The BLS' preliminary benchmark revisions to nonfarm payrolls show a much weaker labor market over most of 2024 and early 2025 than previously estimated," said Oren Klachkin, market economist at Nationwide Financial. "Importantly, the slower job creation implies income growth was also on a softer footing even prior to the recent rise in policy uncertainty and economic slowdown we've seen since the spring. This should give the Fed more impetus to restart its cutting cycle."

Tuesday's revisions are not by themselves a reflection of current conditions as they go back as much as a year and a half. However, recent months' data also has been pointing to a soft labor market. The summer months of June, July and August saw average payroll growth of just 29,000 per month, below the break-even level for keeping the unemployment rate steady.

The largest markdowns came in leisure and hospitality (-176,000), professional and business services (-158,000) and retail trade (-126,200). Most sectors saw downward revisions, though transportation and warehousing and utilities had small gains. Almost all the revisions were confined to the private sector; government jobs were adjusted down by 31,000.

Stocks reacted little to the release, though Treasury yields erased losses and turned higher.

In addition to the economic concerns, the revisions also bring added heat to the BLS, which has been under fire from the White House for its data collection methods and results.

Following a weak jobs report for July that featured substantial downward revisions, President Donald Trump fired then-BLS Commissioner Erika McEntarfer and nominated Heritage Foundation economist E.J. Antoni as her successor. However, the August payrolls count was actually lower than July's and also featured revisions that took down the June total to a loss of 13,000 jobs, the first negative total since December 2020.

The benchmark revisions differ from the monthly adjustments in that they are far more encompassing.

Where the monthly moves come from additional survey data that comes in to the BLS, the annual revisions stem from more comprehensive information from the Quarterly Census of Employment and Wages as well as tax data that essentially offers a full do-over on the data, rather than the incremental course corrections of the monthly reports.

Moreover, the numbers announced Tuesday will face further revisions when the BLS releases the final benchmark figure in February 2026.

For the previous benchmark revision, which encompassed the 12 months prior to March 2024, the initial total was 818,000 fewer jobs, later adjusted in February 2025 to 598,000, still the largest downward move since 2009.

As a share of the 171 million member labor force, the revisions amount to 0.6%. However, the political and economic ramifications could be considerable.

Additional signs of labor market weakness will add to the case that Trump has been pressing for Federal Reserve interest rate cuts.