Trump's pressure on the Fed and the BLS is gaining momentum.
Now, the government itself is admitting it: nearly 1 million jobs reported between 2024 and 2025 never existed!
- Official data revised: -911,000 jobs
The Bureau of Labor Statistics revised payroll data for the period March 2024 to March 2025.
The correction shows that the US created 911,000 fewer jobs than the official figures indicated.
- The impact on the monthly average is brutal
With the revision, the average rate of job creation during the period fell from 147,000 to just 70,000 per month.
In other words, less than half of what the government predicted.
- Almost all sectors were affected
The largest cuts in the review were:
• Leisure and hospitality: -176,000
• Retail, professional services, wholesale, and manufacturing: heavily impacted
• Technology/information sector: worst performance in percentage terms
- How was this possible?
The BLS uses a sample of 121,000 businesses and a model called birth-death, which attempts to estimate business openings and closures.
The problem is that the model failed to capture the post-pandemic slowdown and overestimated business creation.
- This isn't an isolated error. It's happened before.
In 2024, the same BLS estimated that the previous year's data was overstated by 818,000 jobs.
Trump said the numbers were being "cooked" and fired the agency's head.
Now, another review confirms he had reason to be suspicious.
- The revision is preliminary, but the damage is done
The estimate could still change by February, when the final fiscal data is released.
But even if it is softened, the WSJ itself states that the final number will still be "too big to ignore."
- The market begins to absorb the bombshell
According to Polymarket:
• 79% expect a 25-bp cut at the next Fed meeting
• The chance of a 50-bp cut rose to 16.3%
• Only 3% believe the rate will be maintained
Trump again publicly criticized Powell and said the Fed is dragging its feet.
- The credibility of the Fed and the BLS is in question
This revision comes shortly after months of data showing a strong labor market, used as justification for maintaining high interest rates.
Now, all of that is in doubt.
- The Fed May Have Overdone Monetary Tightening
With this new baseline, it's difficult to sustain the "resilient economy" thesis.
And if the labor market has already been weak for months, the real risk is that the Fed raised interest rates too much for too long.