The latest revision of data from the US Bureau of Labor Statistics suggests the labor market may not be as strong as previously portrayed. For the 12 months through March, job creation was reported to be 911,000 fewer than originally estimated.
According to Bank of America analysts, the labor slowdown may have started even earlier than President Donald Trump’s massive tariff announcement. The revision also lowered the average nonfarm payrolls for the first quarter of 2025 to just 36,000 from the previous 111,000, with the summer figure expected to be weaker.
Despite the surprise revision, the unemployment rate remained stable, indicating a lower breakeven employment rate. Analysts said this could be due to a reversal of the immigration surge of the previous year.
Financial markets were little changed. Investors still expect the Fed to cut interest rates by at least 25 basis points at its meeting on September 16-17, with a larger cut of half a percentage point unlikely.
Looking ahead, analysts expect the August jobs report to be revised upwards. If true, it would signal that the labor market has recovered after a second-quarter slowdown, in line with the increase in consumer spending since July.
