All Those Jobs We Added? The Estimate Was Way Off

Each year, the Labor Department reconciles the monthly estimates of new jobs with the actual unemployment tax records that meander in from the states. This year's preliminary revision, for the 12 months ending in March 2024, is a sizable one: The US added 818,000 fewer jobs over that period than initially indicated. The New York Times reports that means employers added an average 174,000 jobs per month over that time, a drop of 28% from the initial average of 242,000 jobs. The Times sees it as "a sign that cracks in the labor market are more severe—and began forming earlier—than initially believed."

CNBC points out that despite the revision, job creation over the 12-month period exceeded 2 million jobs. But it adds that the weaker numbers "could provide further impetus for the Federal Reserve to start lowering interest rates." In terms of specific sectors, professional and business services saw the biggest downward adjustment, at 358,000 fewer jobs, followed by leisure and hospitality at 150,000. Private education and health services, however, saw an upward revision of 87,000 jobs added. The Wall Street Journal reports the revised numbers won't be finalized until February; in each of the last four years, the preliminary number ended up being revised up when it was made official. (More jobs report stories.)