US economy added nearly a million fewer jobs than reported, data shows

NEW YORK - The US economy probably added close to one million fewer jobs in 2024 and early 2025 than previously reported – the latest sign that the labour market, until recently a bright spot in the economy, may be weaker than it initially appeared.

The revised data was released by the Bureau of Labour Statistics (BLS) as part of a longstanding annual process known as benchmarking. But the big downward adjustment comes at an awkward moment for the agency, just weeks after President Donald Trump fired its top official following a separate set of negative revisions in August.

The data released on Sept 9 showed that employers added 911,000 fewer jobs in the 12 months through March than had been indicated in the monthly payroll figures. That implies that the economy added only about 850,000 jobs during that time – half as many as previously reported.

The revision covered the final months of the Biden administration and the early months of Mr Trump’s second presidency. The report did not provide details on when the overestimates took place, or if they were evenly distributed across the 12-month period.

The revision was large, but not surprising. Forecasters had anticipated a substantial downward adjustment based on quarterly data released earlier in 2025, before Mr Trump fired the head of the statistics agency.

The report does not directly affect the period after March. But the scale of the overestimate has led many economists to conclude that more recent jobs gains have probably also been overstated. That could concern policymakers at the Federal Reserve, who have been watching closely for signs that the labour market is losing momentum.

In a speech in Miami in August, Mr Christopher Waller, a Fed governor, cited the forthcoming benchmark revision as one reason that he supported cutting interest rates at the central bank’s meeting next week. The case has only grown stronger since then: On Sept 5, the BLS reported that employers added just 22,000 jobs in August, and that the unemployment rate had edged up to 4.3 per cent – its highest level in nearly four years.

The revision announced on Sept 9 is preliminary and will not be incorporated into the government’s official jobs figures until complete data is available early in 2026.

The annual benchmarking process is necessary because the monthly jobs figures are estimates, based on a survey of more than 100,000 employers. Once a year, the BLS reconciles those estimates with less timely but more authoritative records from state unemployment offices.

In most years, the revisions are small and attract relatively little attention. But if the final update looks similar to the preliminary numbers released on Sept 9, it will be the second unusually large annual revision in a row. The 2024 benchmarking process lowered the estimate of jobs growth by nearly 600,000. (The preliminary estimate released in August 2024 was even larger.)

The 2025 revision would be the largest since 2009 in percentage terms. The adjustments are often larger during turning points in the economy, when surveys struggle to keep up with rapidly shifting patterns of hiring and firing.

In particular, the monthly estimates rely on assumptions about the number of businesses that are opening and closing, which are not directly reflected in the survey data. The Covid-19 pandemic led to an unusual surge in new business formations, which some economists theorise could have skewed the government’s models and led them to overstate jobs growth once that surge ebbed.

The downward revisions were broad-based, but were particularly pronounced in the services sector. The leisure and hospitality sector added 176,000 fewer jobs than previously believed. The retail industry now appears to have lost jobs during the period covered by the revision, rather than eking out a narrow gain. And the information sector, which includes the rapidly changing media and technology industries, lost even more jobs than initially reported.

The White House has pointed to the big revisions as evidence that the BLS has been struggling to measure the economy accurately, and that Mr Trump was right to fire Ms Erika McEntarfer, its Senate-confirmed leader. The President has nominated Mr E.J. Antoni, a long-time critic of the agency, to replace her.

White House press secretary Karoline Leavitt said in a statement following the report: “This is exactly why we need new leadership to restore trust and confidence in the BLS’ data on behalf of the financial markets, businesses, policymakers and families that rely on this data to make major decisions.”

Administration officials have argued that new leadership is required to push the agency to modernise its approach to data collection, including by relying less on surveys.

Experts on the statistical system from both political parties say those criticisms are mostly unfair. They say the agency has been trying to make many of the changes proposed by its critics but has been stymied by budgets that have declined under both Republican and Democratic administrations. Mr Trump’s proposed budget would make further cuts to the agency’s budget and staff.

In a statement on Sept 8, the National Association of Business Economists argued that increased funding could help reduce the size of future revisions.

“With sufficient funding, agencies can modernise data collection and improve the accuracy of first estimates – outcomes that benefit businesses, investors, policymakers and households alike,” the statement said. NYTIMES