New data released by the Bureau of Labor Statistics reveals that US job growth in the past year was weaker than initially estimated. The annual benchmark review of employment data indicates that there were 818,000 fewer jobs in March of this year than originally reported. The BLS conducts a revision of its monthly survey data from businesses’ payrolls and benchmarks the March employment level to data measured by the Quarterly Census of Employment and Wages program every year. This marks the largest downward revision since 2009, showing that the labor market was not as strong as initially thought, although job growth was still historically strong.
The average monthly job gain from April 2023 through March 2024 was 173,500, significantly lower than the initially reported nearly 242,000. Chief economist Chris Rupkey notes that these adjustments do not represent job losses but rather a more accurate count of the actual job numbers. The economy did not require the extra workers that were previously included in the data, and real consumer expenditures drove strong economic growth in the latter half of last year. The revisions were limited to the private sector, with major adjustments in sectors such as professional and business services, information, leisure and hospitality, and manufacturing.
The downward adjustments are significant, with the professional and business services industry seeing a revision down by 358,000 jobs, a decrease of 1.6%. Other major sectors that experienced negative swings include information (down 68,000, 2.3%), leisure and hospitality (down 150,000, 0.9%), and manufacturing (down 115,000, 0.9%). These revised estimates by the Labor Department are preliminary and will not be finalized until February 2025. The revisions provide a critical gauge of the overall health and activity of the US labor market, especially given recent drops in job growth that have been more pronounced than anticipated.
The delayed release of the revised data on Wednesday holds significance for the Federal Reserve as it navigates decisions on interest rate cuts. The weaker job growth numbers add to the uncertainty surrounding economic conditions, potentially influencing future monetary policy decisions. While Wednesday’s revision will not immediately impact existing monthly employment data, it underscores the importance of accurate and up-to-date information for assessing the state of the labor market. As the situation continues to evolve, further updates may shape perspectives on the US economy and potential policy responses.
