BLS Payroll Revision Could Show 800k Fewer Jobs Added

Yields decline ahead of this week’s inflation data. UST yields traded lower across the curve today as markets continued to digest Friday’s nonfarm payrolls data. 2-year yields hovered near their lowest level since 2022, while 10-year yields hit their lowest level since April. The 2-year yield ultimately closed 2 bps lower at 3.49%, the 10-year yield 3 bps lower at 4.04%, and the 30-year yield 7 bps lower at 4.69%. Markets are now looking ahead to key inflation data later this week, with core CPI MoM expecting to show a 0.3% increase for the second month consecutive month, tying for the highest increase since January. Meanwhile, equities rose today, with the S&P 500 and NASDAQ closing 0.21% and 0.45% higher, respectively.

Expected downward revision of jobs data. Tomorrow, the BLS will release their preliminary benchmark revision of payrolls for the period from March of 2024 to March of 2025. Forecasters believe the numbers will show 800k fewer jobs added than previously reported, an average downward revision of 67k jobs per month in the preceding 12-month period. The estimate falls close to 2024 levels, which saw an 818k downward revision, but is high by historical norms; in comparison, 2023 saw a 308k downward revision and 2022 a 482k upward change. If in-line with estimates, the data will underscore a slowing labor market and one that has been trending softer for longer than previously understood. A large revision would further bolster calls for the Fed to cut rates next week and may also bring about additional criticism of the BLS from President Trump.

Trump’s reveals top Fed Chair picks. President Donald Trump announced that White House economic adviser Kevin Hassett, Fed Governor Christopher Waller, and former Fed Governor Kevin Warsh are the finalists to replace current Chair Jerome Powell, telling reporters, “You could say those are the top three.” The timeline for Trump to officially select a replacement is unclear as Powell’s term expires this coming May. Treasury Secretary Scott Bessent, who was briefly seen as a top contender for the role, reiterated on Friday that he is not interested in the position.