The job market has been cooling for a lot longer than originally predicted—but the guidance for HR pros is the same

The job market has been cooling for longer than originally predicted.

A new estimate from the Bureau of Labor Statistics found that employers added 818,000 fewer jobs between April 2023 and March 2024 than what was originally reported. The new data, released on Wednesday, marks the largest downward revision in more than 15 years.

Let’s take a closer look at the numbers and learn more about what the revision means for HR pros.

Hindsight is 20/20. Employers added just 2.1 million jobs between April 2023 and March 2024, far fewer than the 2.9 million originally estimated, the BLS’s revision found. The new estimate comes from state unemployment insurance tax records that are updated once a year. While less timely than the monthly employment data, the revision is more accurate because nearly all employers are expected to file these tax records. By comparison, the monthly jobs data is sourced from a survey of around 145,000 businesses and government agencies and a separate survey of 60,000 households.

Most industries added fewer jobs than originally estimated, and the professional and business services sector recorded the most drastic discrepancy, with 358,000 fewer jobs than initially reported. Some sectors did see higher job growth than originally estimated, including private education and health services, which added 87,000 more jobs—more than any other industry in the new estimate.

Considering the recent BLS jobs and JOLTS reports showed a rise in unemployment and hiring slowdown, this revision suggests that the job market may be weaker than initially believed.

“All together, these revisions support the conclusion that many economists on the frontlines of the jobs market have been saying for several months now, and that many HR pros felt as well: The US jobs market is not as robust as the early data had suggested,” Aaron Terrazas, Glassdoor’s chief economist, told HR Brew via email.

Zoom out. The US Federal Reserve Bank has cited a strong labor market as one factor for holding off on cutting interest rates. While the Fed won’t meet again until September, after the next jobs report comes out, today’s revision in light of a decline in inflation and deterioration in labor market conditions has made it only more likely that the central bank will cut rates next month, Julia Pollak, ZipRecruiter’s chief economist, told HR Brew. As labor experts have previously speculated, a rate cut could boost businesses’ confidence to start hiring again, creating more job movement.

For HR pros, Wednesday’s data revision further highlights the importance of investing in existing talent. Most employees are staying put at their jobs amid the current hiring slowdown, and it’s important that employers engage their workers while they still have them.

“The biggest factor impacting whether an employee decides to stay or chooses to brave the jobs market is not macroeconomic indicators; it’s the day-to-day of how they feel in their job. Is it a good quality job with family-sustaining wages, competitive benefits, flexibility, and opportunities for advancement?” Bekka Rosenbaum, chief strategy officer at job training nonprofit JVS, told HR Brew via email. “That’s what HR leaders should focus on.”