Wall Street’s major indices opened flat on Tuesday as investors remained cautious ahead of a key employment rate revision. In the early hours of trading, the Dow Jones Industrial Average edged up 32.7 points (0.07%) to 45,547.62. S&P 500 gained 8.2 points (0.13%) to 6,503.33, while Nasdaq Composite rose 59.5 points (0.27%) to 21,858.170.
The US labour market may have been significantly weaker than previously reported, according to economists who expect the government’s upcoming benchmark revision to nonfarm payrolls to show as many as 1 million fewer jobs from April 2024 through March 2025.
The preliminary benchmark revision, set to be released Tuesday, follows recent signs of a cooling job market. August job growth was nearly flat, and June saw the first job losses in over four years.
If confirmed, the revision would indicate that labour market weakness began before President Donald Trump’s new round of tariffs and immigration crackdowns, which have reduced labour supply.
At the same time, business adoption of AI and automation is dampening demand for workers.
The Labour Department’s Bureau of Labour Statistics (BLS) could lower employment figures by 400,000 to 1 million jobs based on data from the Quarterly Census of Employment and Wages (QCEW), which covers about 95% of all US jobs and is considered more accurate than the monthly survey data.
Despite the potential revision, economists do not expect it to alter monetary policy in the short term. The Federal Reserve is widely expected to resume interest rate cuts next Wednesday, having paused in January amid uncertainty over tariff impacts.
The final benchmark revision will be published in February alongside the January 2025 jobs report.
In related news, the BLS came under political fire last month after downward revisions to May and June wiped out 258,000 previously reported jobs. President Trump, angered by the update, dismissed BLS Commissioner Erika McEntarfer, accusing her, without evidence, of falsifying data.
Trump has since nominated E.J. Antoni, a critic of the BLS and author of articles suggesting the monthly jobs report be suspended.
His nomination has drawn criticism from economists across the political spectrum, who view him as unqualified for the role.