U.S. Job Gains May Shrink After Key Revision

The U.S. jobs market may not be quite as strong as the official numbers suggest. Economists expect the Labor Department's annual payroll benchmark revision, due Sept. 9, to show that hundreds of thousands of positions reported earlier this year never really existed.

Wells Fargo thinks March 2025 payrolls could be revised down by 475,000 to 790,000, while Evercore ISI sees a drop of about 625,000. Market fears are approaching ~1 million, Evercore's Stan Shipley wrote. Last year's revision trimmed nearly 600,000 jobs from the March 2024 tally.

Fed Governor Chris Waller has already warned the adjustment could flip the story on recent months. He estimates revisions would shave about 60,000 jobs off the monthly average, enough to show private-sector payrolls actually shrank in May, June, and July.

Revisions are based on more complete tax data, which often corrects survey errors. Wells Fargo's Sarah House noted slower growth in the labor supply means the economy doesn't need as many jobs to hold steady. Still, she warned the weaker footing casts a shadow over payroll strength, just as markets and the Fed debate the next rate move.