--- title: "US May Have Lost More Jobs Than Reported Last Year, Fed…" canonical: "https://www.metaintro.com/blog/us-job-losses-revised-fed-official-2026" language: "en" author: "laceykaelani" published: "2026-02-24T11:30:00.000Z" modified: "2026-02-27T22:06:56.679Z" --- [Back to Blog](/blog) [News](/blog/tag/news)[Information](/blog/tag/information)[Jobs](/blog/tag/jobs) # US May Have Lost More Jobs Than Reported Last Year, Fed Official Says Fed Governor Waller says US likely lost jobs in 2025 after BLS revised payrolls down by 898,000. What the data means for job seekers in 2026. [![Lacey Kaelani](https://cdn.metaintro.com/rs:fill:40:40/q:72/plain/images/2934b90b-ca20-4439-bc56-71b4f5733545_1766029465094.png)Lacey Kaelani @laceykaelani](/blog/author/laceykaelani) [February 24, 2026](/blog/archive/2026/02)11 min read ![US May Have Lost More Jobs Than Reported Last Year, Fed Official Says](https://cdn.metaintro.com/rs:fill:1200:675/q:78/plain/images/us-job-losses-revised-fed-official-2026.png) [https://x.com/intent/tweet?text=US%20May%20Have%20Lost%20More%20Jobs%20Than%20Reported%20Last%20Year%2C%20Fed%20Official%20Says&url=https%3A%2F%2Fwww.metaintro.com%2Fblog%2Fus-job-losses-revised-fed-official-2026](https://x.com/intent/tweet?text=US%20May%20Have%20Lost%20More%20Jobs%20Than%20Reported%20Last%20Year%2C%20Fed%20Official%20Says&url=https%3A%2F%2Fwww.metaintro.com%2Fblog%2Fus-job-losses-revised-fed-official-2026)[http://www.facebook.com/sharer.php?u=https%3A%2F%2Fwww.metaintro.com%2Fblog%2Fus-job-losses-revised-fed-official-2026](http://www.facebook.com/sharer.php?u=https%3A%2F%2Fwww.metaintro.com%2Fblog%2Fus-job-losses-revised-fed-official-2026)[https://www.linkedin.com/sharing/share-offsite/?url=https%3A%2F%2Fwww.metaintro.com%2Fblog%2Fus-job-losses-revised-fed-official-2026&title=US%20May%20Have%20Lost%20More%20Jobs%20Than%20Reported%20Last%20Year%2C%20Fed%20Official%20Says](https://www.linkedin.com/sharing/share-offsite/?url=https%3A%2F%2Fwww.metaintro.com%2Fblog%2Fus-job-losses-revised-fed-official-2026&title=US%20May%20Have%20Lost%20More%20Jobs%20Than%20Reported%20Last%20Year%2C%20Fed%20Official%20Says)[mailto:?subject=US%20May%20Have%20Lost%20More%20Jobs%20Than%20Reported%20Last%20Year%2C%20Fed%20Official%20Says&body=https%3A%2F%2Fwww.metaintro.com%2Fblog%2Fus-job-losses-revised-fed-official-2026](mailto:?subject=US%20May%20Have%20Lost%20More%20Jobs%20Than%20Reported%20Last%20Year%2C%20Fed%20Official%20Says&body=https%3A%2F%2Fwww.metaintro.com%2Fblog%2Fus-job-losses-revised-fed-official-2026) The US economy may have actually shed jobs last year rather than gaining them, according to a senior [Federal Reserve](https://www.federalreserve.gov/) official. Fed Governor Chris Waller said on February 23 that revised employment data from the [Bureau of Labor Statistics](https://www.bls.gov/) still contains an "upward bias," and that once further corrections are applied, payroll employment in the United States "probably fell in 2025." The revelation paints a far bleaker picture of the labor market than previously understood, and as [Metaintro](https://www.metaintro.com) reports, job seekers should be paying close attention to what these numbers mean for the hiring landscape heading into 2026. ## What Did the Federal Reserve Say About US Job Losses? Federal Reserve Governor Chris Waller delivered a speech titled "Labor Market Data: Signal or Noise?" at the 42nd Annual Economic Policy Conference of the [National Association for Business Economics](https://www.nabe.com/) (NABE) on February 23, 2026. In it, he made a striking assertion: the United States likely experienced a net decline in payroll employment during 2025. Waller pointed to the annual benchmark revisions published by the [Bureau of Labor Statistics](https://www.bls.gov/) alongside the January 2026 jobs report. Those revisions slashed the total number of jobs created in 2025 from an initially reported 584,000 down to just 181,000. That works out to an average of roughly 15,000 new jobs per month, a figure so low it barely registers against the normal monthly churn of the US labor force. But Waller went further. He argued that even these revised numbers still carry an "upward bias" because the BLS's survey-based methodology tends to overcount jobs during periods of economic softening. Accounting for the corrections that are likely to come in subsequent benchmark revisions, Waller said it seems "clear that payroll employment in the United States probably fell in 2025." If confirmed, it would mark only the third time since 1945 that payroll employment has declined in a year not associated with a formal recession. This is a significant statement from a sitting Federal Reserve governor. Waller, who has generally been regarded as one of the more dovish members of the [Federal Open Market Committee](https://www.federalreserve.gov/monetarypolicy/fomc.htm) (FOMC), had previously been advocating for interest rate cuts based partly on labor market weakness. His comments add a new layer of uncertainty to the economic outlook and have implications for both monetary policy and the job market in 2026. ## How Bad Were the BLS Revisions? The scale of the [Bureau of Labor Statistics](https://www.bls.gov/) revisions is remarkable. Based on more comprehensive data from the Quarterly Census of Employment and Wages (QCEW), the BLS found that its survey-based estimate of 159,275,000 nonfarm jobs as of March 2025 was too high by a seasonally adjusted 898,000. The actual count came in at 158,377,000. That means there were nearly 900,000 fewer jobs in the economy than originally reported. For the full 12 months from April 2024 through March 2025, the economy generated 911,000 fewer jobs than initially estimated. The original survey-based data had suggested roughly 147,000 jobs were being created each month during that period. The revised figure drops that to approximately 76,000 per month, a dramatic reduction that reframes the entire narrative of the 2025 labor market. The BLS attributed the overestimation primarily to two sources: response error and non-response error. The Current Employment Statistics (CES) survey, which forms the basis of the monthly jobs report, relies on businesses voluntarily reporting their payroll numbers. During periods of economic transition, businesses that are downsizing or closing may be less likely to respond, creating a systematic bias toward overestimating employment. The QCEW data, which is derived from unemployment insurance tax records and covers nearly all employers, provides a much more complete picture but arrives with a significant lag. The result is that for much of 2025, policymakers, businesses, and job seekers were operating on data that painted a rosier picture than reality. While the labor market was being described as "resilient" or "slowing gradually," it may have actually been contracting. For anyone who was job hunting last year, this helps explain why it felt harder than the headline numbers suggested. ## Which Sectors Were Hit Hardest? The downward revisions were not distributed evenly across the economy. Three sectors bore the brunt of the corrections, and they represent some of the largest employers in the country. Leisure and hospitality experienced the steepest downward revision, with 176,000 fewer jobs than originally reported. This sector, which includes hotels, restaurants, bars, and entertainment venues, had been one of the strongest engines of post-pandemic job growth. The revision suggests that the sector's recovery stalled far earlier than the data indicated. In January 2026, the sector added just 1,000 jobs, a number that many economists have flagged as a red flag given how reliant the industry is on consumer spending. Professional and business services came in second, with a downward revision of 158,000 jobs. This category encompasses consulting firms, accounting practices, legal services, temporary staffing agencies, and technology services. For white-collar job seekers, this revision confirms what many experienced firsthand: hiring in office-based professional roles slowed dramatically in 2025, with companies pulling back on discretionary spending and delaying new hires. Retail trade saw a revision of 126,200 fewer jobs than initially counted. With major retailers continuing to optimize staffing through automation and self-checkout technology, the sector has been quietly shedding positions even as consumer spending held relatively steady. For the millions of Americans employed in retail, the numbers point to a structural shift that extends well beyond a single year of weak data. The federal government also contributed significantly to job losses. According to [Bloomberg](https://www.bloomberg.com/), approximately 317,000 federal employees left their positions in 2025, a 13.7% reduction compared to September 2024 workforce levels. Much of this was driven by the Department of Government Efficiency (DOGE) initiative, which produced what the [Cato Institute](https://www.cato.org/) described as the "largest peacetime workforce cut on record." An additional 33,000 to 34,000 federal jobs were lost in January 2026 alone. ## What Does This Mean for Job Seekers in 2026? The revised data tells job seekers something many already suspected: 2025 was a much tougher year for the labor market than the official numbers suggested at the time. If you spent months applying for positions and getting few callbacks, it was not just your imagination. The jobs simply were not there at the scale being reported. However, there are cautious reasons for optimism heading into 2026. The January 2026 jobs report showed the economy added 130,000 positions, well above the [Dow Jones](https://www.dowjones.com/) consensus estimate of 55,000. The unemployment rate edged down to 4.3% from 4.4%, and the labor force participation rate ticked up slightly to 62.5%. January was the strongest month for job creation since December 2024. Sector-level data from January 2026 also provides some direction for job seekers. Health care led all industries with 82,000 new positions, reinforcing its status as one of the most reliable sources of employment growth. Social assistance added 42,000 jobs, and construction contributed 33,000. These three sectors represent some of the strongest near-term opportunities for workers looking to enter or transition within the labor market. On the other hand, the sectors that saw the largest downward revisions in 2025 remain areas of caution. Workers in hospitality, retail, and general professional services should approach job searches in those industries with realistic expectations. Competition for open roles is likely to remain stiff, and employers in those sectors may continue to operate with leaner teams. ## How Could This Affect Fed Policy and the Broader Economy? The employment data revisions add complexity to an already difficult set of decisions facing the [Federal Reserve](https://www.federalreserve.gov/). Waller had previously been among the voices arguing for interest rate cuts, partly based on signs of labor market weakness. But the better-than-expected January 2026 jobs report has shifted his calculus. He indicated that the Fed is likely to skip a rate cut at its upcoming March meeting, preferring to wait for more data before acting. For job seekers, the Fed's rate decisions have tangible downstream effects. Lower interest rates tend to stimulate economic activity, making it easier and cheaper for businesses to borrow money for expansion and hiring. Higher rates, on the other hand, can suppress business investment and slow the pace of job creation. If the Fed holds rates steady through the spring, the hiring environment may remain in the low-growth mode that characterized much of 2025. The broader economic picture is one of contradictions. GDP growth remained positive in 2025, consumer spending held up, and inflation continued to moderate. Yet the labor market, by the revised numbers, was significantly weaker than any of those indicators suggested. This disconnect raises important questions about how accurately the economy's health is being measured and whether other economic indicators might also be due for revisions. Waller acknowledged this uncertainty directly, titling his speech "Labor Market Data: Signal or Noise?" The question is not merely academic. If the labor market was already contracting in 2025 without triggering a formal recession, it suggests the economy may be more fragile than the headline numbers indicate. For workers, this means continued vigilance: building emergency savings, keeping skills current, and exploring industries that are demonstrating real growth rather than relying on sectors where the data has proven unreliable. ## Why Are These Revisions So Unusual? Annual benchmark revisions by the BLS are routine. Every February, the agency reconciles its monthly survey estimates with more comprehensive data from unemployment insurance records. Revisions of 100,000 to 200,000 jobs in either direction are not uncommon. What makes the 2025 revision exceptional is its magnitude: 898,000 jobs in a single benchmark cycle, representing one of the largest corrections in the program's history. The revision also transformed the narrative of 2025 from a year of modest but positive job growth into one of the weakest years for employment in decades outside of a formal recession. The initial data had suggested the economy added 584,000 jobs during the year. The revised total of 181,000 is less than a third of that figure. And if Waller is correct that even 181,000 carries an upward bias, the true number may have been negative. Part of what drove the discrepancy is the evolving nature of the economy itself. The BLS's birth-death model, which estimates the net number of businesses opening and closing each month, has struggled to keep pace with rapid changes in the business landscape. The rise of remote work, the gig economy, and AI-driven automation have all complicated the task of counting jobs accurately. These structural shifts mean that the gap between survey data and reality may persist, making future employment reports less reliable as leading indicators. For job seekers, the lesson is clear: do not rely solely on headline employment numbers to gauge the health of the labor market. The on-the-ground reality, including job posting volumes, interview callback rates, and industry-specific hiring trends, often tells a more accurate story than the monthly BLS report. Staying informed through multiple data sources and tracking sector-level hiring patterns can provide a more realistic picture of where the opportunities are. ## People Also Asked **Q:** How many jobs were revised downward for 2025? **A:** The Bureau of Labor Statistics revised 2025 employment data downward by 898,000 jobs as of March 2025. Total job creation for the year was cut from an initially reported 584,000 to just 181,000, an average of only 15,000 new jobs per month. Fed Governor Waller has suggested the true number may be negative once additional corrections are applied. **Q:** Which industries lost the most jobs in the 2025 revision? **A:** Leisure and hospitality saw the largest downward revision at 176,000 fewer jobs than originally reported. Professional and business services followed with a 158,000-job revision, and retail trade was revised down by 126,200 jobs. The federal government also shed approximately 317,000 workers during 2025, largely through the DOGE workforce reduction initiative. **Q:** Is the job market improving in 2026? **A:** Early signs point to cautious improvement. The January 2026 jobs report showed 130,000 new positions added, well above expectations of 55,000. The unemployment rate dipped to 4.3%, and health care, social assistance, and construction led hiring. However, the Federal Reserve is expected to hold interest rates steady through at least March, and the full effects of the 2025 weakness are still being absorbed by the economy. --- Stay ahead of the market and make informed career decisions. [Metaintro](https://www.metaintro.com) delivers the latest labor market data, hiring trends, and expert analysis straight to your inbox so you can navigate the job market with confidence. 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