The Bureau of Labor Statistics (BLS) recently announced the preliminary estimate of the upcoming annual benchmark revision to the establishment survey employment series. Accordingly, the U.S. economy had about 501,000 fewer jobs as of March 2019 than the BLS initially calculated. This is the largest revision since the last stages of the Great Recession in 2009.
In 2018, the average 223,000 monthly increase in employment may have been too good to be true, and economists are trimming their estimates closer to a range of 180,000 to 185,000.
It’s worth pointing out that this annual benchmark revision was much larger than usual. For instance, the preliminary revision in 2018 showed the economy produced 43,000 additional jobs than was originally reported.
A few of the biggest drops in employment were seen in retail (−146,400), professional and business services (−163,000) and leisure and hospitality (−175,000).
What this revision implies is that the economy did not see a significant benefit from the Trump tax cuts and increased federal spending. It also seems that the economy may be weaker than previously believed, and some speculate it could have implications for the Federal Reserve.
The current revision reflects an adjustment of 0.3%, although the number is not final. The final benchmark revision will be issued in February 2020 with the publication of the January 2020 Employment Situation.