In case you hadn’t heard, the Bureau of Labor Statistics (BLS) recently announced a huge preliminary downward revision in U.S. job gains for the year ending in March. This change indicates that perhaps the labor market’s tightness was previously overstated. Just look at this morning’s employment report for July, which lists a paltry gain of just 73,000 jobs. In addition to the rosy July report, it hides the very bad downward revisions for May and June.
This new data provides the most transformative information yet to shift the narrative around the U.S. labor market. In recent years, many have seen it as a bastion of strength and stability. The BLS collects this data and publishes employment data on a monthly basis. The annual revisions that finalize in February 2026 will upend everything we think we know about future job growth. These are still only preliminary figures as it makes clear that the pace of job creation has fallen far short of initial expectations.
The Bureau of Labor Statistics indicated positive net job gains in July. Moreover, U.S. employers posted about 7.2 million job openings at month’s end, further underscoring the still-hot demand for workers even in the face of lagging job growth. Nationwide, the economy added just 22,000 new jobs in August. This has led to questions of the overall health of the labor market and fears of sustainability.
Nonetheless, even with these headwinds, there are positive indications of resilience across the rest of the labor market. For the week ended September 20, the number of Americans filing for unemployment benefits fell by 14,000 to 218,000. The four-week average of claims, which evens out week-to-week fluctuations, dropped by 2,750 to 237,500. The official count of total Americans drawing unemployment benefits fell by 2,000. This lowered the total to 1.93 million for the week ending September 13.
Given all of that, layoffs are historically low, making for a somewhat stable jobless claims environment. Applications for weekly jobless benefits have remained muted, generally running at levels of between 200,000 and 250,000. This trend underscores a booming demand for labor, despite a relatively recent slowdown in job creation.
We saw something huge happen last week with the Federal Reserve. They reduced their benchmark short-term interest rate by a quarter-point in light of the latest economic data. This step represents a dramatic change in priorities. Instead, it needs to prioritize creating high-quality jobs and fostering a stable labor market alongside controlling inflation.
