Annual Nonfarm Payrolls Revised Down by 911,000 — White House Pushes for Rate Cuts, Was the U.S. Already in Recession?

TradingKey - On Tuesday (local time), the U.S. Bureau of Labor Statistics released its annual benchmark revision to employment data, revealing that the U.S. added 911,000 fewer jobs over the 12 months through March 2025 than previously reported — the largest downward revision in history. The data now show an average monthly nonfarm payroll gain of just 71,000, down from the previously reported 147,000.

Source: Bloomberg

The White House swiftly criticized the economic policies of the Biden administration. Press Secretary Caroline Levitt said the revision “confirms what President Trump has been saying all along,” and accused the Bureau of Labor Statistics of systemic failure, calling for a restoration of data credibility.

She stated bluntly that Federal Reserve Chair Jerome Powell “now has no excuse — he must cut rates immediately.” Treasury Secretary Scott Bessent added that “the data have proven inaccurate,” emphasizing that high interest rates are now stifling economic growth.

In a new report, Anna Wong, Chief U.S. Economist at Bloomberg, argued that the revised data suggest the U.S. economy may have already entered a recession as early as April 2024.

Wong noted that wage growth in 2024 was insufficient to sustain job creation. Although the Fed’s decisive 50-basis-point rate cut in September 2024 briefly revived hiring — lifting the monthly average to 133,000 — the recovery stalled after rate cuts were paused in early 2025. The three-month average job gain has since fallen back to just 35,000, indicating that the rebound has lost momentum.

In financial markets, the reaction was muted, as the revision had been widely anticipated. Instead, equities rose on the stronger case for rate cuts, with the S&P 500 gaining 0.27% to close at 6,512.61, a new record high.

According to the CME Group’s FedWatch Tool, the probability of a 25-basis-point rate cut in September has risen to 93%, while the odds of 50 basis points of cumulative cuts by October now exceed 70%.

Source: CME Group

Markets now widely agree that the Labor Department’s latest data provide the Federal Reserve with strong justification to begin easing monetary policy. As Wong put it: “The labor market looks recessionary. A premature pause in rate cuts risks derailing the recovery before it can gain traction.”