U.S. job growth in the year through March was probably far less robust than government figures currently show, underscoring a labor market that shifted into a lower gear well before the hiring slowdown this summer.

Economists at Wells Fargo & Co., Comerica Bank and Pantheon Macroeconomics expect the Bureau of Labor Statistics’ preliminary benchmark revision on Tuesday to show the March payrolls count was almost 800,000 less than currently estimated — or about 67,000 a month on average. Nomura Securities, Bank of America Corp. and Royal Bank of Canada say the downgrade could even be closer to a million.

While a dated snapshot of job growth, a substantial downward revision would illustrate a labor market with far less steam last year and reinforce expectations for a series of Federal Reserve interest-rate cuts. A second year of sizable revisions to the employment count also risks drawing the ire of President Donald Trump, who has criticized the accuracy of BLS data.

Once a year, BLS benchmarks the March payrolls level to a more accurate but less timely data source called the Quarterly Census of Employment and Wages, which is based on state unemployment insurance tax records and covers nearly all U.S. jobs. That’s in addition to the revisions it conducts in each month’s jobs report, all of which ultimately make the data more accurate.

“A big downward revision to job growth through March 2025 would have less implications for monetary policy than a downward revision to job growth in the most recent months, but it does set the stage for the broader context of how the economy has been doing,” said Bill Adams, chief economist at Comerica. “And all things equal, downward revisions to job growth increase pressure on the Fed to ease policy.”

It would also embolden those who say the Fed should have started to ease policy months ago. Fed Governor Christopher Waller, who voted in favor of a rate cut at the central bank’s last meeting in July — when officials chose to hold rates steady instead — said he expects the benchmark revisions to reduce payrolls growth by an average of about 60,000 a month. Policymakers are already widely expected to lower borrowing costs at their meeting next week.

Political implications

Though the revisions wouldn’t change the current understanding of the labor market, they would suggest the step-down in hiring seen in recent months actually began much earlier. The Trump administration could point to Tuesday’s number, which is a preliminary estimate for the year through March 2025, as evidence that job growth was weakening well before he took office. The final figure comes out early next year.

“This mostly reflects job creation prior to Trump’s term. So he can argue really that this was a sign that the economy that he inherited was actually much weaker than we all thought,” said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics.

The data come a month after unusually large downward revisions to monthly jobs data sparked outrage at the White House and prompted Trump to fire the head of the BLS. He took aim not only at those monthly revisions, but also last year’s preliminary benchmark revision, which suggested payrolls would be marked down by the most since 2009.

Though Trump has been critical of revisions, both the monthly and benchmark adjustments are part of a routine process of updating estimates as more data become available. Revisions have been bigger in recent years partly due to declining response rates.

Birth-death model

For most of the recent years, monthly payroll data have indicated stronger job growth than the QCEW figures. Some economists partly attribute the difference to the so-called birth-death model — an adjustment by the BLS to account for the net number of businesses opening and closing. That calculation has been more difficult since the pandemic.

Others have argued there’s another reason behind the discrepancy: immigration. While the monthly payrolls report doesn’t inquire about citizenship status, the QCEW report utilizes records on unemployment insurance — which undocumented immigrants can’t apply for.

Ultimately, economists and policymakers will use the preliminary benchmark figures to gauge the speed at which the labor market has been decelerating as they await more complete 2025 data released with the government’s final revision in February.

“If I see a significant revision to data from last year, that tells me what the starting off point is,” said Carrie Freestone, an economist at the Royal Bank of Canada. “But what I think Fed officials are going to be most concerned about is the fact that we’re losing momentum — the fact that we’ve likely reached a turning point in the labor market.”

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