U.S. Added 818,000 Fewer Jobs Than Previously Thought From March 2023 To March 2024, Government Says

Topline

Prior data far overestimated the recent labor market recovery, the government said Wednesday, a potentially worrisome sign as slowing job growth shakes confidence in the economy, though some experts suggest the downward revisions aren’t as bad as they may seem on the surface.

Key Facts

Key Background

The update came as part of the regularly scheduled first benchmark revision to the government’s monthly nonfarm payrolls data, the most widely cited measure of the overall U.S. employment picture. The massive revisions were due to the government’s recalibration to more precise quarterly unemployment claim data as opposed to the monthly surveys of employers which are used for initial monthly estimates. Economists anticipated a major downward revision Wednesday, with Goldman Sachs economists forecasting one of 600,000 to 1 million. Massive revisions have been fairly normal in recent years, as the government said last August it overestimated the job growth for the 12-month period ending March 2023 by 306,000 and in August 2019 it underestimated job growth for the period ending March 2022 by 462,000. The most recent downward revision comes as late spring and early summer nonfarm payroll expansion slowed, as the U.S. added an average of 154,000 jobs monthly from April to July, and unemployment spiked to 4.3%, its highest rate since October 2021. The weak August 2 nonfarm payrolls report briefly ignited fears a U.S. recession was imminent, though more recent data has restored confidence in the direction of the economy.

Chief Critics

There’s little reason to fret at the headline revision number, according to some economists. Goldman economist Walker wrote ahead of the Labor Department report the 818,000 downward revision is likely “erroneous” and “misleading,” estimating the new forecast likely overstated the error by 400,000 to 600,000, due in large part to the methodology mostly excluding unauthorized immigrants, a group which strongly contributes to overall job growth. “We’re not sweating this report,” wrote Yardeni Research founder Ed Yardeni, who added the revision is largely “old news” considering it tracks employment data from several months ago.

Further Reading

ForbesDid Biden Or Trump Create More Jobs? Here Are The Facts.By Derek Saul
ForbesWill There Be A Recession? Goldman Sachs Lowers Odds As Consumer Health Worries ‘Greatly Exaggerated’By Derek Saul