Ooops! Government Says It Overestimated Job Gains By 818,000

The jobs market in the U.S. was not as hot as it looked for much of last year and early this year, government data released Wednesday showed.

The U.S. economy added 818,000 fewer jobs than the government had previously estimated from the spring of 2023 to the spring of 2024, signaling that the labor market was not as strong and began to soften earlier than previously thought, according to the Bureau of Labor Statistics.

According to revised government data, employment growth from April 2023 to March 2024 amounted to roughly 2.1 million jobs, a substantial downgrade from the originally reported 2.9 million.

The revision undercuts claims by Kamala Harris that the Biden administration’s policies have created a very strong jobs market. This is the largest downward revision since 2009.

The revision means that the economy added an average of 173,000 jobs per month during that period, down from the previously estimated 242,000. This indicates that the labor market was not as strong as it looked during the period and began to soften earlier than thought.

The revisions result from a quarterly survey of all U.S. companies participating in the state-federal unemployment benefits system. These firms are required to report their employee numbers for tax purposes.

This tax-related data allows the Bureau of Labor Statistics to more accurately gauge the actual number of jobs being created in the economy.

These weaker job numbers bolster the case for the Federal Reserve to lower interest rates in September. With inflation gradually easing toward the Fed’s 2 percent target, the health of the labor market has become increasingly pivotal in the Fed’s deliberations on when to cut interest rates raised in 2022 and 2023 to combat the worst inflation in four decades.