Recent revisions to U.S. employment figures released earlier this week point to weaker job creation than previously thought, according to Bank of America analysts.
The Bureau of Labor Statistics now estimates that employment for the 12 months through March was overstated by about 911,000 jobs, a substantial downward adjustment that implies the labor market slowdown may have started even before President Donald Trump’s sweeping import tariffs were rolled out.
Economists had expected the BLS’s preliminary benchmark revision, covering April 2024 to March 2025, to reduce payrolls by somewhere between 400,000 and 1 million jobs. The adjustments aim to more accurately account for businesses that opened or closed during the period.
The preliminary data, published Tuesday, is based on the Quarterly Census of Employment and Wages, which uses state unemployment insurance filings submitted by nearly all U.S. employers. The final benchmark revision will be published in February 2026, alongside the January jobs report.
BofA analysts cautioned clients that a full picture of the labor market won’t be clear until the final revisions are out. But for now, they estimate that the adjustments would lower the three-month average of nonfarm payrolls in the first quarter of 2025 to 36,000 from 111,000. The average for summer 2024 would be even weaker, they added.
“Given that the unemployment rate and other labor slack measures were largely stable in this period, this likely indicates a lower breakeven rate in 2024 perhaps due to the reversal of an immigration boom in the prior year,” the analysts said.
Market reaction to the BLS revisions was limited. The analysts noted that rate cut expectations for the Fed’s September 16–17 meeting shifted only in a “muted” fashion. Traders continue to price in a quarter-point cut as nearly certain, with CME’s FedWatch Tool showing about a 10% probability of a deeper 50-basis-point move from the current 4.25%–4.5% range.
Looking ahead, the BofA team said further revisions could change the narrative. “Upward revisions” to August’s jobs report may be possible, they suggested, since responses to BLS surveys are usually lighter in late summer.
“If that happens, it will imply the labor market has also re-accelerated since July after the soft patch in second-quarter due to peak tariff uncertainty to match the strength we are seeing in consumer spending since July,” they added.
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