BLS Jobs Report – Big Miss, Bigger Revisions
The July Jobs Report from the Bureau of Labor Statistics (BLS) missed the mark, with just 73,000 jobs added, well below expectations of 110,000. But the headline doesn’t tell the whole story.
Under the surface, the raw (non-seasonally adjusted) data actually showed 1.07 million jobs lost. The BLS added 257,000 jobs through their Birth/Death model, which estimates new business formation. Without this adjustment, we’d likely be looking at a negative print. And while that model tries to estimate economic activity, the BLS’s own Business Employment Dynamics (BED) report just revised Q4 2024’s Birth/Death contribution down by 170,000 jobs—not exactly confidence-inspiring.
Revisions were also a major theme:
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May was originally reported at 139,000, then adjusted to 144,000, and now slashed to just 19,000.
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June, initially printed at 147,000, is now down to 14,000, with one more revision still to come.
If that June number goes negative (like ADP already has), it would be a stunning reversal. So far in 2025, the BLS has averaged 77,000 in downward revisions per month—double the revision pace from 2024.
Zooming in:
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Private sector payrolls added just 83,000 jobs, largely from education and health services.
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Last month’s private payrolls were also revised to flat.
And while the Business Survey gives us the headline number, the Household Survey (which drives the unemployment rate) showed a 260,000 job loss. That pushed unemployment from 4.1% to 4.2%, but the exact figure was 4.248%—just a hair away from rounding to 4.3%.
We’re also seeing more Americans drop out of the labor force. The participation rate has fallen to 62.2%, down 0.5% over the past 10 months. That’s equivalent to roughly 7 million people leaving the labor force since April. The broader U-6 unemployment rate ticked up from 7.7% to 7.9%.
Wages and Hours
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Average Hourly Earnings rose 0.3% in July and 3.9% year-over-year (slightly hotter than expected).
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The average workweek increased from 34.2 to 34.3 hours.
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Together, that boosted average weekly earnings by 0.6%, a stronger number—thanks mostly to longer hours worked.
Bowman and Waller Were Right
Fed Governors Michelle Bowman and Christopher Waller, who dissented at the recent Fed meeting and pushed for a rate cut, now look prescient. They argued that:
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Tariffs are a one-time price shock, not lasting inflation.
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GDP growth averaged just 1.2% through the first half of the year.
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And most importantly, that the labor market is much weaker than the BLS reports suggest, due to consistent overestimation and heavy downward revisions.
Bowman even cited a custom metric—Core PCE inflation minus tariffs—which she pegged at 2.5%, not far from the Fed’s 2% goal.
Bottom line: If the Fed had seen the final numbers from May and June upfront—19,000 and 14,000 jobs—they would have likely cut rates this week. And as we’ve been saying: revisions matter.