WASHINGTON — The U.S. economy added nearly a million fewer jobs in 2024 and early 2025 than previously reported, according to revised Bureau of Labor Statistics (BLS) data released Tuesday. The annual benchmark revision, normally a technical exercise, revealed that employers created 911,000 fewer jobs in the 12 months through March than earlier believed, suggesting the economy added only about 850,000 jobs during that period. Economists had expected a downgrade of about 700,000, but the scale of the cut caught markets and policymakers off guard.
The revision deepens concerns about the health of the labor market, which until recently had been one of the economy’s strongest pillars. The latest adjustment comes just weeks after President Trump dismissed BLS Commissioner Erika McEntarfer following another set of negative revisions, part of a growing White House campaign questioning the credibility of the agency. The administration has nominated economist E.J. Antoni, a frequent critic of BLS methods, to replace her.
Markets were unsettled by the news. Stock futures pointed to a strong open Tuesday morning but flattened after the announcement, reflecting fears that the U.S. is sliding into stagflation. Consumer prices for August, due Thursday, are expected to show another uptick, adding to pressure on households and retailers already contending with higher costs.
Those pressures are showing up most clearly in the retail sector. A report from Challenger, Gray & Christmas released last week found that retailers announced 83,656 job cuts through August, a 242 percent increase from the same period last year. August alone saw 85,979 job cuts across all sectors, the highest total for the month since 2020. “Retailers are being hard hit by tariffs, inflation, and ongoing economic uncertainty, causing bankruptcies and closures,” said Andrew Challenger, Senior Vice President at Challenger, Gray & Christmas. Analysts warn that the weak numbers may foreshadow a difficult holiday season, with fewer seasonal hires than usual and potentially more layoffs.
Federal Reserve officials are watching closely. In a speech last month, Governor Christopher Waller pointed to the benchmark revision as one reason he supported cutting interest rates. With unemployment now at 4.3 percent, its highest level in nearly four years, and August’s payroll report showing only 22,000 new jobs, the case for easing has grown stronger. Investors are split over whether the Fed will deliver a standard quarter-point cut or a larger half-point move.
The BLS revision is preliminary and will not be incorporated into official jobs data until early next year. However, the size of the adjustment, combined with mounting layoffs in retail and other industries, suggests that the labor market may be losing momentum far faster than government statistics initially indicated.
