U.S. employment figures could be revised down by as many as one million jobs when the Labor Department releases its preliminary nonfarm payroll benchmark estimate on Tuesday, economists forecast.
The anticipated revision follows weak jobs data last Friday, which showed hiring nearly stalled in August and the first monthly job losses in over four years recorded in June. Analysts say the adjustment would indicate the labor market was already softening even before President Donald Trump’s trade tariffs and tighter immigration policies added pressure. Businesses’ growing adoption of artificial intelligence and automation has further dampened demand for workers.
“The slowdown in job growth is less about a collapse and more about recalibration,” said Sung Won Sohn, professor of finance and economics at Loyola Marymount University. “The era of easy job gains is over. The economy is entering a more complex and uneven phase of adjustment.”
Economists expect the Bureau of Labor Statistics could lower job counts from April 2024 through March 2025 by between 400,000 and one million, based on the Quarterly Census of Employment and Wages (QCEW). For context, employment for the 12 months through March 2024 was revised down by nearly 600,000 jobs.
“If the revision reaches the higher end of one million, it would suggest the labor market had nearly stalled in early 2025, even before trade tensions escalated,” said Shruti Mishra, economist at Bank of America Securities.
While the revisions may signal deeper weaknesses in hiring trends, economists believe they will have limited impact on monetary policy. The Federal Reserve is still expected to resume interest rate cuts next week after pausing in January, as policymakers balance inflation risks with slowing growth.
The monthly payroll report draws from surveys of roughly 121,000 businesses and government agencies, covering 631,000 worksites. By contrast, the QCEW data is based on unemployment insurance filings and captures about 95% of total employment, making it a more comprehensive benchmark for labor market health.
