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Revisions reverse US labor market narrative

August 06, 2025

July’s jobs report released by the U.S. Bureau of Labor Statistics (BLS) on August 1 altered the narrative of a stabilizing labor market. Nonfarm payrolls posted a downside surprise in July by adding 73,000 jobs – well below the consensus estimate of 104,000.* But the big news was the sizeable revisions that wiped out 258,000 jobs from the prior two months. That’s the largest downward revision on record, outside of the pandemic, going back to 1979. “The labor market is softening, and there’s no denying that,” said Garrett Melson, Portfolio Strategist, Natixis Investment Managers Solutions.


Two-Month nonfarm payroll revisions (3/31/79 to 7/31/25)
Two-Month nonfarm payrolls revisions (3/31/79–7-31-25) Source: FactSet
  • Instead of employment gains of 144k and 147k in May and June, respectively, we now have gains of just 19k and 14k.*
  • And, the three-month average of nonfarm payrolls growth is now revised down from 150k to just 35k.*
  • While government payrolls revisions drove 119k of the 258k total, a function of state and local education employment, revisions were broad based across every major industry.*
  • The unemployment rate moved up to 4.248%.*

* Source: Bloomberg

This material is provided for informational purposes only and should not be construed as investment advice. The views and opinions contained herein reflect the subjective judgments and assumptions of the authors only and do not necessarily reflect the views of Natixis Investment Managers, or any of its affiliates. The views and opinions expressed may change based on market and other conditions. There can be no assurance that developments will transpire as forecasted, and actual results may vary.

All investing involves risk, including the risk of loss. Investment risk exists with equity, fixed income, and alternative investments. There is no assurance that any investment will meet its performance objectives or that losses will be avoided. Investors should fully understand the risks associated with any investment prior to investing.

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