To what extent is the US labor market slowing down? Keep a close eye on the non-farm payroll report on Wednesday, as it is of great significance and contains a lot of information.

The upcoming release of the U.S. employment report is of great significance, with an unusually dense amount of information. The report is expected to reveal to what extent the U.S. labor market has slowed in recent years, or even if there has been no growth at all. This report, compiled by the Bureau of Labor Statistics (BLS), was originally scheduled to be released on February 6th but was delayed due to the partial government shutdown. In the more routine parts of the report, based on a survey of economists by Bloomberg, the median forecast is that nonfarm payrolls in January may increase by 69,000; the unemployment rate is expected to remain at 4.4%, slightly lower than the four-year high of 4.5% reached in November of last year. Analysts expect that the January nonfarm payrolls report may not change the overall weak picture of the labor market. In addition to the usual monthly nonfarm payrolls and unemployment rate data, the January employment report to be released this Wednesday will also include the highly anticipated revisions to employment data. Previous preliminary estimates indicate that in the year ending in March 2025, employment may be revised downwards by 911,000, setting a record, which means that the pace of hiring will be significantly downgraded. Industry insiders believe that this year's annual benchmark revision will be even more important than usual. Currently, the labor market seems to be at a tipping point between adding jobs and potentially losing jobs. Every January when the employment report is released, the BLS aligns nonfarm payroll data with a more accurate but less timely data set, the Quarterly Census of Employment and Wages. This data is based on state unemployment insurance tax records and covers most employment positions in the U.S. In addition to releasing the adjusted employment levels as of March 2025, the BLS will also revise the nonfarm payroll data for each month of last year. These revisions also reflect updates to the agency's model, which is used to incorporate information on business openings and closings, as well as new seasonal adjustment factors. Last year, the U.S. labor market was widely believed to be gradually weakening, with economists describing it as an environment of "low hiring, low layoffs." However, these revisions may show that the slowdown in hiring is even more severe than previously expected. This could change the Federal Reserve's view of the labor market. Federal Reserve Chairman Powell recently stated that the labor market is showing signs of stability. He believes that job growth may have been overestimated, but the overall economic conditions are still strong enough for officials to maintain interest rates unchanged at this time. His colleague, Federal Reserve Board Governor Waller, holds a different opinion. Waller explained why he voted to cut rates again at the January monetary policy meeting, saying that these revisions are likely to show that there was almost no job growth last year. "Zero. None. None whatsoever. This does not look anything like a healthy labor market." Data revisions It should be noted that the above revisions will not affect the unemployment rate, as the unemployment rate is based on household surveys; nonfarm payroll data comes from surveys of businesses. Normally, the BLS would incorporate new population estimates into household surveys in the January employment report. However, due to last year's record government shutdown, this adjustment was postponed by a month. In recent years, the extent of revisions to employment data has generally been higher than in the past, with some economists attributing this to unique economic dynamics following the pandemic. The issue of revisions is also highly politicized, and to a large extent led to former President Trump's decision to dismiss the former BLS director, claiming that employment data was being manipulated for political purposes. When appointing a new director, Trump once again criticized the BLS for releasing "extremely inaccurate data." Economists generally refute this claim. They believe that as more raw data is collected, revisions are inevitable, and these adjustments help data publishers strike a balance between speed and accuracy, while maintaining comparability over time. "Revisions can cause confusion, sometimes fuel conspiracy theories, and even lead to dismissals. But as long as revisions are transparent, predictable, and verifiable, they should actually increase your trust in official statistics." This article is from "Wall Street News," written by He Hao, GMTEight Editor: Li Cheng.