Economists Flag Key U.S. Labor Data Revision as BLS Prepares Major Population Adjustment

Key takeawaysEconomists say markets should watch population control revisions from the U.S. Bureau of Labor Statistics, not just the Non-Farm Payrolls report.Population aged 16+ could be revised down by about 590,000, with the labor force lowered by roughly 370,000.U.S. labor force growth may slow to 900,000 in 2025 and fall below 500,000 in 2026.Key ratios such as the unemployment rate and labor force participation rate are expected to change only slightly.BLS Population Adjustment Could Reshape Labor Market DataEconomists are warning that markets should pay close attention to upcoming population revisions from the U.S. Bureau of Labor Statistics, which will be released alongside the latest labor market data.The update follows a 43-day government shutdown that delayed the release of population control data for last year.According to Carl Riccadonna, Chief U.S. Economist at BNP Paribas, recent data from the United States Census Bureau suggests the BLS may have overestimated population growth since late 2024.Labor Force and Employment Figures May Be Revised LowerRiccadonna expects the January revisions to include:Population aged 16 and over: downward revision of about 590,000Labor force: reduction of roughly 370,000Household employment figures: likely to see similar downward adjustmentsUsing experimental BLS data that integrates immigration trends and updated Census figures, economists estimate that:U.S. labor force growth in 2025: about 900,000Labor force growth in 2026: expected to fall below 500,000These adjustments reflect slowing demographic expansion and changes in migration patterns.Comparability of Monthly Data May Be LimitedThe population control revision will only affect the January household survey, meaning month-to-month comparisons may become less reliable.Indicators impacted include:Household employmentLabor force sizeUnemployment totalsHowever, economists note that headline ratios are usually less affected.Key Labor Market Ratios Likely to Remain StableAccording to Aditya Bhave, economist at Bank of America Securities, major labor market indicators should see minimal changes.Historically:Population adjustments shift unemployment and participation rates by only around 0.1 percentage points.Bhave noted that this year’s revisions could slightly lower both the unemployment rate and the labor force participation rate, though the impact is expected to remain limited.