The Bureau of Labor Statistics (BLS) is expected to announce a major revision to U.S. employment figures on Wednesday, potentially cutting up to one million jobs from the reported total for April 2023 through March 2024. If the downward adjustment materializes, it would indicate that the U.S. job market is not as healthy as previously reported, raising concerns about the overall strength of the economy.
The anticipated revision could deal a serious blow to the economic narrative promoted by the Biden administration, which has highlighted job growth as a key indicator of recovery. However, a correction of this magnitude suggests that employment figures may have been overestimated, leading to an artificially positive portrayal of the economy.
Large employment revisions are uncommon but not without precedent. California’s nonpartisan Legislative Analyst’s Office (LAO) recently revealed that reported job gains in the state were largely inaccurate due to overly optimistic benchmarks. The upcoming BLS revision could correct similar discrepancies at the national level.
This news comes on the heels of a lackluster July jobs report, which not only fell short of estimates but also showed an unexpected rise in the unemployment rate. The increase has led some economists to speculate that the Sahm Rule, which signals a recession if unemployment rises by half a percent over a three-month moving average, may have been triggered.
As Wednesday’s revision approaches, the BLS figures are likely to prompt further debate about the true state of the U.S. economy and whether the administration has been overstating its recovery efforts.
