The Bureau of Labor Statistics' preliminary annual benchmark review indicates that there were 818,000 fewer jobs in March 2024 than initially reported. Each year, the BLS revises data from its monthly payroll survey, adjusting the March employment levels to align with figures from the Quarterly Census of Employment and Wages program.
This marks the largest downward revision since 2009, suggesting that the labor market wasn’t as overheated as previously believed, though job growth remained historically strong. Spread over the year, the average monthly job gain from April 2023 to March 2024 was 173,500, down from the nearly 242,000 originally reported.
“These aren’t job losses but corrections to job counts that were never that high,” wrote Chris Rupkey, chief economist at FwdBonds. He added that the economy thrived despite these "phantom" workers, as consumer spending fueled strong economic growth in the latter half of 2023.
The revisions mainly impacted the private sector, with professional and business services seeing a reduction of 358,000 jobs, or 1.6%. Other industries hit hard by the revisions included information (down 68,000 jobs, or 2.3%), leisure and hospitality (down 150,000, or 0.9%), and manufacturing (down 115,000, or 0.9%).
The preliminary estimates, released after an unusual delay, will be finalized in February 2025. While these revisions won't immediately affect current monthly employment data, they provide important insights into the state of the U.S. labor market. Recent job growth has slowed more than expected, increasing the pressure on the Federal Reserve as it considers interest rate cuts.
Fed Chair Jerome Powell is scheduled to speak at the Kansas City Fed’s annual economic symposium in Jackson Hole, Wyoming, on Friday. Economists believe that the job revisions could push the central bank to more explicitly signal its plans for monetary policy adjustments. “This could be the wake-up call Powell and the Fed need to commit to rate cuts and forward guidance,” said Michael Block, co-founder and chief strategy officer at AgentSmyth, in a comment to CNN.
