The Bureau of Labor Statistics revealed on August 28 that U.S. payrolls were overstated by 79,000 in the 12 months ending March 2026.
Prior to these revisions, the BLS had reported that the economy created 272,000 jobs during that 12-month span, a figure now proven to be inflated.
The preliminary annual benchmark revision came weeks after the Labor Department reported a surprise drop in employment during the month of July.
Downward revisions were driven entirely by the private sector, where payrolls were found to have been overstated by 178,000 jobs.
The sectors hit hardest by the revision included retail, which shed 155,000 jobs from the count, along with private education and health services at minus 96,000.
Financial activities accounted for another 76,000 in downward adjustments, further illustrating the breadth of overstatement across the private economy.
“The preliminary benchmark revision reflects the difference between two independently derived employment counts, each subject to their own sources of error,” the bureau said.
These benchmark revisions have drawn significant attention in recent years due to their increasingly substantial downward adjustments to nonfarm payroll figures.
Last year’s revision alone showed that payrolls had been overstated by a striking 898,000 jobs, a historically large correction that rattled markets.
The two prior benchmark updates also came in negative, with the federal agency ultimately finding 266,000 fewer jobs in 2023 and 589,000 fewer in 2024 than initially reported.
The cumulative scale of these repeated downward corrections signals a labor market that has been consistently weaker than headline figures suggested throughout this period.
The U.S. job creation rate has been decelerating over the last two years, driven partly by slower demand for labor from businesses uncertain about the broader economic outlook.
Companies have also grown more cautious about hiring as they weigh whether advances in artificial intelligence could allow them to replace human workers with technology tools.
Together, these forces have created a labor market that appears to be cooling faster than official monthly reports initially captured, raising fresh concerns among economists and policymakers.
