U.S. Job Growth Has Been Weaker Than Originally Reported

The U.S. economy added 818,000 fewer jobs between March 2023 and March 2024 than originally estimated. That’s according to preliminary estimates of the annual benchmark revision to U.S. employment figures. Each year, the Bureau of Labor Statistics benchmarks its employment estimate for the month of March against comprehensive employment data derived from state unemployment insurance tax records that nearly all employers are required to file. While this revision is typically small, averaging 0.1 percent of total nonfarm employment over the past 10 years, this year’s revision was more significant than that. The preliminary downward revision of -818,000 jobs is equivalent to -0.5 percent of total employment, the largest downward adjustment since 2009.

So what does this mean for the broader economy? It mostly means that the U.S. labor market wasn’t quite as overheated as initially thought. Firstly, it’s important to note that these aren’t jobs that are suddenly lost leaving people unemployed, but jobs that were simply overcounted. Perhaps more importantly though, it needs to be noted that job growth was still solid during the revised period. Even after the downward revision, the U.S. added 2.08 million jobs in the 12 months ending March 2024, down from the original estimate of 2.90 million. That brings the average monthly job growth during this period from 242,000 to 174,000, which is still very solid.

As our chart shows, four industries accounted for more than 90 percent of the downward revision: professional and business services, leisure and hospitality, retail trade and manufacturing. But while the leisure and hospitality sector still added nearly 300,000 jobs between March 2023 and 2024, the other three industries saw employment decline according to the revised estimates.