The Labor Department on Tuesday published the preliminary estimate of its annual benchmark revision to nonfarm payrolls, which showed the U.S. economy added significantly fewer jobs than previously reported.
The Bureau of Labor Statistics (BLS) published its first estimate of the annual benchmark revision, which lowered its estimate of employment by about 911,000 jobs over the April 2024 to March 2025 period.
BLS goes through the benchmarking process each year to incorporate more accurate data from state unemployment records that are published quarterly along with business birth and death records into its estimates.
The process yields a more complete and accurate picture of the labor market than the agency’s monthly surveys that are used to create the jobs report, and serves as a means of mitigating the non-response and reporting errors that accumulate month-to-month.
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The BLS’ benchmark revision reflects how much those monthly jobs reports overstated or understated actual job growth from April 2024 to March 2025.
The data released Tuesday serves as a preliminary estimate of the benchmark revision, while the final benchmark revision will be incorporated into the BLS’ January 2026 jobs report to be released in February next year.
Within the downward revision of 911,000 jobs in the preliminary estimate, private payrolls were reduced by 880,000 jobs, while government employment was lowered by 31,000 jobs.
The trade, transportation and utilities category saw employment revised downward by 226,000 jobs – including 126,200 in retail trade and 110,300 in wholesale trade – losses that were partially offset by gains of 6,600 jobs in transportation and warehousing and 3,700 jobs in the utility sector.
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Employment in the leisure and hospitality sector was lowered by 176,000 jobs under the revision.
Professional and business services employment was revised down by 158,000 jobs, while the information sector’s job gains were pared back by 67,000 and financial activities by 39,000 jobs.
Manufacturing jobs were reduced by 95,000 jobs, while construction employment was reduced by 29,000 jobs. Mining and logging jobs were cut by 4,000 in the revision.
Private education and health services employment was reduced by 35,000 jobs, and other services accounted for a decline of 51,000 jobs.
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BLS noted that its preliminary estimate of the benchmark revision reduced employment by 0.6% over the April 2024 to March 2025 period. Over the last 10 years, BLS’ annual benchmark revisions on average increased total employment by 0.2%.
Last year, the BLS’ preliminary benchmark revision for the April 2023 to March 2024 period suggested a downward adjustment to employment of 818,000 jobs – the largest since 2009.
When the BLS released its final revisions for that period with the January jobs report earlier this year, the downward revision was smaller at 589,000 fewer jobs than initially reported.
The report comes after President Donald Trump fired then-BLS Commissioner Erika McEntarfer following the release of a weaker than expected July jobs report, which revised employment in May and June downward by 258,000 jobs.
Trump claimed that the jobs report was “rigged” and accused McEntarfer of politically manipulating jobs data in advance of last year’s election.
The BLS revisions did little to change the market’s expectations for the Fed to cut interest rates next week. The probability of a 25-basis-point cut ticked slightly higher from 89% yesterday to 92% today, while the odds of a larger 50-basis-point cut ebbed from over 10% to 8% in that period, according to the CME FedWatch tool.
LPL chief economist Jeffrey Roach noted that the benchmark revision pulled down average monthly jobs gains over the April 2024 to March 2025 period from 147,000 to 71,000.
“The labor market appears weaker than originally reported. A deteriorating labor market will allow the Fed to highlight the need to ease rates. Investors should expect the Fed to officially start the rate-cutting campaign at the next meeting. Solid household wealth is keeping the middle and upper-income consumer afloat but has the economy in an a-typical business cycle,” Roach explained.
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