The government's figures for job growth over the past year are set to be significantly revised down, the Bureau of Labor Statistics reported Wednesday.
The agency said in a preliminary estimate that total employment growth through March of this year is set to be revised down by 818,000. That is 0.5% of total jobs, a larger revision than normal.
By comparison, total job growth over that period was 2.9 million, according to the establishment survey, meaning that nearly a third of job gains are set to be erased. The weaker numbers are a setback for President Joe Biden and Vice President and Democratic presidential nominee Kamala Harris , who have touted the job gains of recent years.
Still, even with the revisions, job growth has been strong by historical norms. Pre-revisions, the economy added 242,000 jobs a month for the year ending in March. With the revisions, the number would be 174,000. That is likely enough to keep the unemployment rate trending down.
“This preliminary estimate doesn’t change the fact that the jobs recovery has been and remains historically strong, delivering solid job and wage gains, strong consumer spending, and record small business creation,” said Jared Bernstein, the chairman of Biden's Council of Economic Advisers.
Former President Donald Trump reacted to the news by saying the Biden administration had been "caught fraudulently manipulating" job numbers and that millions of jobs will vanish if Harris defeats him in the presidential election.
The revisions, though, are part of the agency's routine process for updating its estimates of job growth. They are preliminary, and the final revisions will be made with the jobs report for January 2025.
The BLS re-benchmarks its payroll employment numbers, which are based on a monthly survey of establishments, to a comprehensive count of jobs, a process that can result in major revisions.
That comprehensive count, the BLS’s Quarterly Census of Employment and Wages, is a quarterly assessment of employment and wages reported by employers, covering more than 95% of jobs.
The revisions bring the job growth numbers closer in line with the estimates from the separate household survey included in the monthly jobs report, which has shown slower employment gains than the establishment survey. Still, it is possible that the household survey is understating underlying growth, and the same is true of the QCEW.
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One reason that might be the case is that it is less likely to capture the employment of unauthorized immigrants. A recent analysis from the Congressional Budget Office, which incorporated data from the Department of Homeland Security regarding the numbers of people crossing the border without authorization, found that the influx of illegal immigrants over the past few years has resulted in faster population growth and higher employment than reported by the BLS.
Goldman Sachs economists noted in a recent commentary that the QCEW is based on comprehensive unemployment insurance records, but unauthorized immigrants generally don’t qualify for unemployment benefits.
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