US Job Growth Revised Downward by Nearly 1 Million

Good evening. We've got updates on some legal challenges to President Trump's power on tariffs and federal funding, plus the latest on this month's shutdown threat and details about today's massive jobs data shake-up. So let's get to it.

Supreme Court Agrees to Fast-Track Trump Tariffs Case, Lets Trump Block Foreign Aid

The Supreme Court on Tuesday stepped in quickly in separate legal challenges to President Donald Trump's authority over tariffs and federal funding.

The court agreed to quickly take up two cases challenging the president's authority to unilaterally impose sweeping tariffs, a signature element of President Donald Trump's economic policy. Lower courts ruled that a set of tariffs Trump enacted under an emergency declaration were illegal. The high court will hear the case in November, and Trump's tariffs will remain in place, at least for now.

In another case involving presidential power, Chief Justice John Roberts today allowed the Trump administration to freeze $4 billion in foreign aid funding appropriated by Congress. The order, which came in response to an emergency request filed by the administration on Monday, is temporary, allowing time for the full court to consider the case - but the move reportedly could make it harder for the groups that sued over the administration's funding cuts to get the money at stake. Roberts noted in his brief, one-page order, that the foreign aid cut is "currently pending before Congress" in the form of a presidential rescission proposal.

Trump Asks Congress to Punt Shutdown Deadline to January 31

As congressional leaders try to figure out a path to avert a government shutdown beginning on October 1 - or, in some cases, decide if they want to avoid a shutdown at all - the White House on Tuesday signaled what it wants: a temporary extension of current federal funding through January 2026.

Congress will more than likely need to pass a stopgap spending measure, known as a continuing resolution, to keep federal agencies open beyond September 30, when current federal funding expires. Congressional appropriators continue to work on annual funding measures, but they won't be finishing the 12 bills before the end of the month, which is also the end of the fiscal year. That means a temporary funding fix will be needed, and lawmakers will have to decide how long it should last.

Some key lawmakers reportedly prefer a short-term stopgap that would extend only into November or perhaps December, allowing time to reach a larger deal on spending, but the White House on Tuesday indicated that it wants a four-month extension. The suggestion was included as part of a 21-page list of "spending anomalies," or funding adjustments, that the White House wants included in any stopgap bill. The document was obtained by Politico.

Rep. Rosa De Lauro, the top Democrat on the House Appropriations Committee, said the White House and budget director Russell Vought made Congress wait for the anomalies request and are trying to undermine a bipartisan process for funding the government as part of an attack on congressional power of the purse.

"Today's request from President Trump and Russ Vought to kick the can down the road on government funding until January 31 makes it clear the White House wants to be able to continue stealing from American communities for another four months," De Lauro said in a statement. "Delaying the critical work of funding the government until the end of January is only step one in President Trump and Russ Vought's plan to never fund it at all."

House Majority Leader Steve Scalise told reporters Tuesday that the January 31 date "was a suggestion" from the White House. "We're still working on the dates and how long it would extend, but that hasn't been finalized yet," he said.

Top House and Senate appropriators reportedly met Monday night to discuss their path forward, including the possibility of moving ahead with a trio of spending bills passed by the Senate.

"We had a productive conversation about conferencing the first three bills and a bipartisan, short-term CR to allow us time to pass full-year bills, which I believe is critical to protect Democratic priorities and programs that families count on every day," Sen. Patty Murray, the ranking member on the Senate Appropriations panel, told Punchbowl News. She added that she is looking for House Speaker Mike Johnson and Senate Majority Leader John Thune to commit to a bipartisan stopgap spending bill.

US Job Growth Revised Downward by Nearly 1 Million

The U.S. labor market added 911,000 fewer jobs from April 2024 to March 2025 than previously estimated, the Bureau of Labor Statistics announced Tuesday. The preliminary revision - the largest such adjustment on record - indicates that the labor market was considerably weaker last year than economists thought.

In the initial reports, U.S. employers added 1.8 million jobs during the 12-month period, but the revised data shows that the total was about 847,000, or a bit less than half the previous total. Average monthly job growth has been reduced from roughly 147,000 a month to about 70,000.

The downward revision means there were 176,000 fewer jobs created in the leisure and hospitality sector in the year ending March 2025; 158,000 fewer jobs created in professional and business services; and 126,000 fewer jobs created in retail.

The revised numbers come on the heels of the August jobs report, which confirmed that the labor market has been slowing sharply over the last few months, a dynamic many economists have linked to the Trump administration's tariff hikes.

Slower for longer: The revised numbers may help explain why so many Americans have been reporting for more than a year that the economy is weaker than some of the top-level data would suggest.

Heather Long, chief economist at Navy Federal Credit Union, said the updated data pushes the beginning of the slowdown further into the past. "The frozen job market started way before this summer," Long wrote on social media.

We won't know the monthly distribution of the downward revisions until more complete data is released in February, making it hard to pinpoint the beginning of the softer hiring trend.

RSM Chief Economist Joseph Brusuelas said that the revision bolsters the decision by the Federal Reserve to cut interest rates by a full point in 2024. He also noted that in the context of the national economy, the latest revisions are not as large as they may seem at first glance and are consistent with an economic growth rate of about 1.4%, as expected.

"In an economy where 163.3 million individuals are employed, a downward revision of 911,000 distributed over the space of twelve months is not that large from a quantitative point of view," Brusuelas wrote in a research note.

Still, the revision does suggest that the economy has been just puttering along for many months now. Economist Sal Guatieri of BMO Capital Markets told the Associated Press that the revision paints "a much weaker portrait of the job market than initially thought. While the revision doesn't say much about what has happened since March, it suggests the labor market had less momentum heading into the trade war."

Claiming victory: The White House found vindication in the revised numbers. "Today, the BLS released the largest downward revision on record proving that President Trump was right: Biden's economy was a disaster and the BLS is broken," White House Press Secretary Karoline Leavitt said in a statement.

Leavitt claimed that the report proves that the president was justified when he fired the head of the BLS last month - though the leader, Erika McEntarfer, was fired by Trump because the jobs numbers for July were too low and thus "rigged" against him, in his view.

Experts admit that there are long-standing problems with BLS data collection but say it has more to do with insufficient funding and falling response rates to surveys than any kind of intentional manipulation by political operators. The data also typically has trouble detecting turning points in the economy.

James Knightley, an economist at ING, wrote in a research note that the BLS data can be "significantly wrong" when the economy downshifts. "In the early stages of a downturn they tend to overestimate the jobs created by new start-ups - 'births' - and underestimate the number of jobs lost by the 'death' of failing small businesses," he wrote. "These revisions suggest that jobs momentum is being lost from an even weaker position than originally thought. It also reinforces the belief that even the poor numbers seen in 2025 are probably overstating the health of the employment market."

More fuel for the Fed: The White House said the revision also confirms that Trump was correct when he demanded that the Federal Reserve cut interest rates.

"Jerome 'Too Late' Powell ... has officially run out of excuses and must cut the rates now," Leavitt said, referring to the Fed's leader.

The bottom line: Whether Trump can take credit or not, it seems all but certain that the Fed will cut its benchmark rate for the first time this year at the conclusion of its meeting on September 16 and 17, and the revisions only bolstered that expectation. The odds of more than one rate cut this year are rising, as well, with the CME FedWatch Tool showing a 70% chance of a rate cut in October and a 63% chance of a rate cut in December.

Fiscal News Roundup

• White House 'Anomalies' List Kick-Starts Stopgap Funding Talks – Roll Call
• Trump Wants to Punt Shutdown Deadline to Jan. 31 – Politico
• Supreme Court to Quickly Consider if Trump Has Power to Impose Sweeping Tariffs – Associated Press
• Supreme Court Temporarily Allows Trump to Withhold $4 Billion in Foreign Aid – NBC News
• Employers Added Nearly a Million Fewer Jobs Than Believed, Data Shows – New York Times
• 'Behind the Curve': Pressure Mounts for Fed Rate Cuts After Massive Employment Revision – Politico
• The U.S. Is Losing Thousands of Manufacturing Jobs, Analysis Finds – CBS News
• Americans' Confidence in Finding a New Job Falls to Record Low – CBS News
• White House Prepares Report Critical of Statistics Agency – Wall Street Journal
• Inflation Quashed Household Income Gains in 2024, Census Finds – Washington Post
• White House Looking to Cut Certain Disability Benefits – Axios
• Trump Administration Halts I.R.S. Crackdown on Major Tax Shelters – New York Times
• Pressure Mounts on GOP Leaders to Extend Obamacare Subsidies – The Hill
• Democrats Accuse Treasury of Creating New Business Tax Loopholes – The Hill
• Capitol Agenda: Why This 'Nuclear' Strike Isn't Blowing Up the Senate – Politico
• Inside the Chaos at the C.D.C. – New Yorker
• RFK Jr.'s New MAHA Roadmap Is Finally Public – Politico
• Instead of Selling, Some Rural Hospitals Band Together to Survive – KFF Health News
• In the Fallout From Trump's Health Funding Cuts, States Face Tough Budget Decisions – KFF Health News

Views and Analysis

• The Big BLS Revision Isn't a Conspiracy – Jonathan Levin, Bloomberg
• 'A Full-on Base Revolt': Why This Shutdown Threat Is Different – Benjy Sarlin, Adam Carlson and Jim Geraghty, Washington Post
• RFK Jr.'s Vision for the CDC Should Alarm Congress – Bloomberg Editorial Board
• RFK Jr.'s 'MAHA' Report Gives Road Map to Improving Kids' Health but Stops Short of Action – Berkeley Lovelace Jr. and Aria Bendix, NBC News
• Trump's Auto Tariffs Starts to Bite – Wall Street Journal Editorial Board
• The ICE Raid on the Georgia Hyundai Plant Makes No Sense – Mary Ellen Klas, Bloomberg
• Trump Lets Bosses Grab $400 Billion in Worker Pay – David Dayen, American Prospect
• Cases on Trump's Powers Raise Stakes for Congress – Louise Radnofsky and Jasmine Lie, Wall Street Journal
• Trump Slaps His Name on Infrastructure Projects Funded by Biden – Robert McCoy, New Republic
• One Big Beautiful Bill Act Makes the Individual Income Tax More Complex – Alex Muresianu, Sam Cluggish and Rebecca Walker, Tax Foundation
• Slowing Immigration Has Halted Job Growth in Some Industries – Jed Kolko, Peterson Institute for International Economics