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(NewsNation) — The job market suddenly looks far weaker than it did just a day ago, after major revisions wiped out hundreds of thousands of previously reported gains.
U.S. employers added 73,000 jobs in July, short of the 115,000 forecasters expected. But Friday's Labor Department data revealed a more troubling trend: the job market has been much softer than many realized.
Downward revisions shaved 258,000 jobs off May and June payrolls, erasing 88% of their previously reported additions. May's initial estimate of 139,000 jobs was slashed to just 19,000, the steepest revision since March 2021.
President Donald Trump responded to the lackluster jobs report by directing his team to fire Bureau of Labor Statistics Commissioner Erika McEntarfer, accusing her of manipulating job numbers to help Kamala Harris get elected.
"She will be replaced with someone much more competent and qualified," Trump wrote on Truth Social.
There's no evidence McEntarfer, who was nominated by former President Joe Biden, manipulated any data and revisions are a normal part of the Labor Department's standard reporting process. Here's how they work.
How are the jobs numbers calculated?
At the beginning of each month, the Bureau of Labor Statistics (BLS) releases an estimate of the change in payroll employment for the previous month.
That estimate is based on a monthly survey of about 560,000 businesses selected to represent the millions of employers nationwide.
Specifically, businesses report the total number of people who worked or received pay during the pay period that includes the 12th of the month.
Using that information, the BLS produces an initial estimate for the overall economy based on job gains or losses at the businesses that have submitted their data. The result is a closely watched jobs report that economists and policymakers rely on to gauge the strength of the labor market.
There's just one problem: many businesses haven't finalized their payroll data in time for the initial release, meaning those early numbers often represent an incomplete snapshot.
To account for this, the BLS issues two subsequent updates — known as revisions — as more businesses submit their data.
Why the first jobs report rarely tells the full story
The Labor Department's third estimate, the final revision, is considered the most accurate because it reflects the fullest picture of payroll data available.
According to the BLS, the share of payroll data collected can rise from about 73% at the time of the initial release to roughly 95% by the third estimate.
When job numbers are revised downward, as has been the case throughout this year, it suggests the labor market is cooler than initially expected. Upward revisions, on the other hand, indicate a stronger job market than first reported.
Revisions have drawn more attention in recent years because the media — and politicians — tend to focus heavily on the initial estimates.
Now-Secretary of State Marco Rubio blasted the Biden-Harris administration in Oct. 2024, calling the jobs report "fake" and highlighting significant downward revisions to previous months' data.
In 2024, initial job estimates were revised down by an average of 20,000 jobs, suggesting the labor market was somewhat cooler than first reported. Revisions have been even larger so far this year, with initial estimates revised down by an average of 66,000 jobs from January through May.
It's important to note: revisions aren't mistakes, they're simply updates with more complete information.
You can view all monthly job revisions since 1979 here.
What's going on with the current job market?
Daniel Zhao, chief economist at Glassdoor, called Friday's jobs report "one of the most shocking in the last few years," while Bankrate analyst Sarah Foster described the revisions as "eye-popping."
For many job seekers, the latest report probably feels like vindication — confirming what they've long suspected: the labor market isn't as steady as headlines have made it seem.
Data shows recent college grads are facing the toughest job market in years. At the same time, monthly job gains have been disproportionately concentrated in health care, masking sluggish growth elsewhere.
President Trump's unpredictable trade policies have likely played a role.
"Even though President Trump has backed down from the most extreme tariff plans announced on Liberation Day, economic headwinds from tariffs and policy uncertainty seem to be pushing businesses to be more cautious about hiring," Zhao noted in a statement.
Even as job growth slows, the unemployment rate has edged up only modestly — from 4.1% in June to 4.2% in July. This suggests a gradually cooling labor market rather than a sudden collapse.
Harvard economist Jason Furman said the latest jobs report "should raise our level of concern," but not to "panic level."
"The broader indicators still suggest this is only a gradually slowing labor market that in some respects is still on the tight side," Furman wrote on X Friday.
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