WASHINGTON (dpa-AFX) - Job growth in the U.S. in the 12 months to March was significantly less than what was reported earlier, preliminary revisions released by the Bureau of Labor Statistics showed on Tuesday, signaling that the labor market began cooling earlier than estimated and strengthened the case for interest rate cuts from the Federal Reserve next week.
The latest Current Employment Statistics (CES) national benchmark revision revealed that the employment growth figure for the 12-month period to March was revised lower by 911,000 or 0.6 percent, which is the biggest in recent decades. The downgrade means that the U.S. economy created less than half the jobs previously reported for the time period.
ING economist James Knightley said these revisions suggest that jobs momentum is being lost from an even weaker position than originally thought and also reinforces the belief that even the poor numbers seen in 2025 are probably overstating the health of the employment market.
'So even if we get an upside surprise to US inflation on Thursday the Federal Reserve will very likely be cutting interest rates next week and follow up with 25bp moves in October and December,' the economist added.
The Fed is widely expected to lower the federal funds rate after holding steady thus far this year. A 25-basis-point cut is forecast as the labor market cools, while inflation remains strong.
The final benchmark revision will be issued in February 2026 with the January 2026 jobs report.
CES employment estimates are benchmarked to comprehensive counts of employment from the Quarterly Census of Employment and Wages (QCEW) and these are extracted from state unemployment insurance tax records filed by employers, according to the BLS.
The not seasonally adjusted total nonfarm employment estimate for March 2024 was revised down by 598,000 or 0.4 percent in February.
The report showed downgrades in job growth levels in all industries with information, leisure and hospitality and wholesale trade having significant markdowns.
Tuesday's data on the labor market further adds to other indicators of a slowing labor market that would pressure the Fed policymakers to ease interest rate as they meet next week.
Official data released last week showed that non-farm payroll employment crept up by 22,000 jobs in August, which was far less than the expected increase of 75,000. The unemployment rate inched up to 4.3 percent in August from 4.2 in July. Weekly jobless claims rose more-than-expected to a two-month high in the week ended August 30.
A monthly NY Fed survey this week revealed growing unemployment worries among consumers' and their expectations of finding a new job in the event of losing the current one hit a record low.
Elsewhere, a survey by payroll processor ADP revealed that private sector employment in the U.S. increased less than expected in August.
Massive revisions to monthly labor statistics invited criticism from President Donald Trump who fired the BLS chief recently. The administration has nominated E.J. Antoni, a well-known defender of Trump's economic policy, to the post.
'Today's massive downward revision gives the American people even more reason to doubt the integrity of data being published by BLS,' U.S. Secretary of Labor Lori Chavez-DeRemer said. 'Considering these reports are the foundation of economic forecasts and major policy decisions, there is no room for such a significant and consistent amount of error. It's imperative for the data to remain accurate, impartial, and never altered for political gain.'
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