The Zhitong Finance App learned that the actual performance of the US labor market is weaker than previously released data. According to preliminary benchmark revised data released by the US Bureau of Labor Statistics (BLS) on Friday, the number of non-farm payrolls in the US is expected to be revised down by 79,000 in the year ending March this year, a decrease of about 0.1%, further highlighting that the labor market is cooling down. This result was also significantly weaker than market expectations. Economists previously surveyed by the media expected a median increase of 183,000 people. The final benchmark revision results are expected to be announced early next year.
The slowdown in employment growth also further confirms the Federal Reserve's previous judgment on the cooling of the labor market. Although inflation continues to be above target levels, the Federal Reserve cut interest rates in 2025 to cope with the gradual loss of momentum in the job market.
Prior to the announcement of this amendment, the US government's non-seasonally adjusted data showed that in the year ending March, US employers had added a cumulative total of about 211,000 jobs. According to data compiled by the media, this is equivalent to an average monthly increase of about 17,600 people. However, this preliminary benchmark revision means that the actual average monthly employment growth rate is probably only about 11,000 people, indicating that the previously released data overestimates the growth rate of the US job market to a certain extent.
Notably, this has become the seventh time in the past eight years that the preliminary benchmark has revised the estimate of the number of employed persons lowered. However, the extent of this adjustment is relatively limited, and it also reflects that the US labor market may currently be in a relatively balanced but less dynamic state: companies are unwilling to recruit new employees on a large scale, but there are also no large-scale layoffs.
This is consistent with the recent “low recruitment and low layoffs” characteristic of the US job market.
From an industry perspective, the decline in private sector employment data is even more obvious. In the year ending March, the number of people employed in the private sector was revised down by 178,000, mainly reflecting weaker employment growth than previously estimated in various industries, including retail trade, education and health services, manufacturing, and commercial services.
At the same time, employment numbers increased in some industries, including transportation and warehousing, information, financial activities, and construction. The number of people employed in the government sector was also revised upward, offsetting the decline in private sector employment data to a certain extent.
This also means that part of the resilience of the US job market as a whole comes from government departments, and recruitment activity in the private economy is actually weaker than previous data showed.
The US Bureau of Labor Statistics adjusts the benchmark for non-farm payrolls in March every year.
Unlike the monthly non-farm payroll reports, the annual benchmark revisions are mainly based on the Quarterly Employment and Wage Survey (QCEW). The database is based on state unemployment insurance tax records and covers almost all US jobs, so the accuracy is generally higher than monthly employment surveys, but the data release time is relatively delayed.
By comparing monthly non-farm payrolls data with QCEW, BLS re-calibrates the number of people employed previously announced.
Although this process can improve the accuracy of US employment statistics, large-scale revisions to non-farm payrolls data have received increasing attention from investors and the US government in recent years.
In contrast, the initial downgrade of 79,000 people this year was far lower than last year. The preliminary benchmark revision announced in 2025 drastically lowered the number of people employed in the year ending March of that year by 911,000, the biggest drop since records were set, and once again triggered criticism from the White House about the quality of BLS employment statistics.
About a month before the 2025 benchmark revision was announced, US President Trump also dismissed the head of BLS at the time after a monthly employment report showed that recruitment was clearly weak.
On August 7 this year, the US Senate confirmed Trump's nomination of Brett Matsumoto as the head of the BLS. Matsumoto has a doctorate degree in economics and is also a BLS veteran. Currently, his BLS is responsible for publishing a series of important economic indicators, including non-farm payrolls, unemployment, and consumer price index (CPI). These data are also one of the most influential US economic data in the global financial market.
The latest benchmark correction did not indicate a cliff-style deterioration in the US job market, but it further proved that employment growth over the past year was actually slower than previously thought.
This is significant for the Federal Reserve. On the one hand, US inflation is still above the Federal Reserve's 2% target. Federal Reserve Chairman Walsh just warned in his speech at Jackson Hole on Friday that potential inflation has yet to show a meaningful continuous improvement, and emphasized that the Fed still “has work to do” until inflation is unclear and quickly falls back to the 2% target. Meanwhile, the job market continues to send signals of cooling. The latest benchmark revision shows that the average number of new jobs per month may be only about 11,000. Coupled with the recent weakening of retail sales, the unexpected drop in employment in July, and the decline in employment data for the previous month, all indicate that the growth momentum of the US economy and labor market is weakening.
Therefore, the combination of still high inflation and cooling employment will continue to test the Federal Reserve's policy trade-offs. If interest rates are raised further to suppress inflation, it may increase downward pressure on US employment and the economy; however, if policies shift to easing too soon, it may also increase the risk that inflation will remain above target for a long time.