(CNN) -- The American jobs market has been running in a much lower gear than previously thought, according to a preliminary report released Tuesday.

The US economy added about 911,000 fewer jobs than initially estimated for the year ending in March, the Bureau of Labor Statistics report suggests. If this were to hold - the final annual benchmark revision will be reported in February 2026 - it would be the largest annual revision to US jobs data on record.

The expected, but significantly large preliminary revision, comes as the BLS is in the throes of upheaval. President Donald Trump last month fired BLS commissioner Erika McEntarfer claiming, without evidence, that she "rigged" the July jobs report to include larger-than-typical downward revisions.

Trump administration officials, including the head of the Department of Labor, seized on Tuesday's large estimated revision, claiming that it was a symptom of bigger problems at the BLS.

But Tuesday's revisions release is the first step in BLS' annual benchmark review of jobs data, a process that has taken place in some shape or form going back 90 years.

Every year, the BLS seeks to provide a near-complete employment count by squaring past jobs data from business surveys (more timely but not as accurate) with comprehensive unemployment insurance quarterly tax filings (highly accurate but significantly lagged in timing).

The preliminary benchmark revision of -911,000 came in on the high end of economists' estimates and accounts for about a 0.6% share of overall employment. The annual benchmark revisions during the past 10 years had an absolute average of 0.2% of total nonfarm employment, BLS data shows.

If spread out through the year ended in March, the revision would lower the average monthly job gains by nearly 76,000 positions between April 2024 and March 2025. As it stands now, job growth during that period was 146,500 per month.

If finalized, this downward revision would bring that to about 70,500 per month, BLS data shows.

Probable causes for downward revisions

Economists said Tuesday that the massive revision was probably attributable in part to the pandemic and subsequent economic environment throwing out of whack the so-called birth-death model, a longstanding statistical tool that's used to measure business and job creation.

Prior to Tuesday's release, economists predicted that a large downward revision was likely due to three primary factors: weaker-than-inferred job creation at new firms; sampling errors resulting from declining survey response rates; and, to some extent, adjustments for asylum-seekers and other undocumented workers.

"The gargantuan downward revision is probably mostly due to the faulty birth-death model (of business creation/cessation)," Pantheon Macroeconomics economists wrote Tuesday in a note to investors following the BLS' revision report. "Probably about two-thirds of the downward benchmark revision looks set to be due to weaker job creation at new firms than the BLS initially inferred from its model."

One-quarter of the preliminary estimated revision was in the trade, transportation and utilities sector, which had an estimated downward revision of 226,000 jobs, or 0.8% of employment.

However, the information sector (which encompasses technology firms) looks to be revised down by the biggest share on a percentage basis: The preliminary estimates show a downward revision of 67,000 jobs, or 2.3%.

"It was pretty broad declines across industries like financial activities, professional and business services and things that aren't really closely tied to undocumented workers," Sarah House, managing director and senior economist at Wells Fargo, told CNN in an interview. "I think that suggests there are bigger things than just slower growth in the labor supply at play."

What goes into these revisions

Federal data is fluid and frequently subject to change, as more detailed and accurate information becomes readily available. The BLS' monthly jobs report is meant to provide a higher-frequency look at employment trends, but that timeliness comes with a cost to accuracy.

To arrive at the monthly payroll estimates, the BLS surveys about 120,000 US employers, accounting for 600,000 work sites (roughly one-third of employment) and is based upon survey responses from employers across a wide swath of industries. Those respondents are given three opportunities to report their payroll gains and losses for any given month.

Every year, the BLS conducts a revision to the data from its monthly survey of businesses' payrolls, then it benchmarks the March employment level to those measured by the Quarterly Census of Employment and Wages program.

The QCEW provides a more comprehensive read on the number of businesses, employees and wages at the state, regional and county level because it derives that data from quarterly tax reports submitted by businesses to their states. Given that process, the QCEW comes with a significant lag: The data for the first quarter of this year also was released Tuesday.

BLS under siege

Tuesday's release comes at a time when economic data is frequently weaponized and the BLS has found itself in the crosshairs.

Secretary of Labor Lori Chavez-DeRemer posted on X Tuesday that Tuesday's preliminary revision "gives the American people even more reason to doubt the integrity of data being published" by the BLS.

"Leaders at the bureau failed to improve their practices during the Biden administration, utilizing outdated methods that rendered a once reliable system completely ineffective and calling into question the motivation behind their inaction," Chavez-DeRemer claimed, adding that Trump and his administration "are putting a stop to years of neglect."

Chavez-DeRemer said the Labor Department is committed to finding solutions to the large BLS revisions, including modernization that could improve jobs data transparency "and deliver more accurate and timely data for American businesses and workers."

Federal economic data is considered the gold standard because of its longstanding reliability, quality, comprehensiveness, history and transparency.

However, that critical statistical infrastructure has long been at risk of crumbling. Economists, statisticians and policymakers have sounded alarm bells for years, stating that federal data is in a precarious state, because of decreased funding, survey response rates and public trust.

The BLS' staffing is down about 20% since February and one-third of its leadership roles are unfilled, Erica Groshen, former BLS commissioner and co-chair of the Friends of the Bureau of Labor Statistics organization. Amid the shortages and an ongoing hiring freeze, the agency has scaled back on data collections, including those that feed into closely watched inflation reports.

Budget proposals from the Trump administration call for further funding and employment reductions.

"They are scrambling, reassigning people, retraining people, doubling up and cutting some granularity in some programs in order to cope," Groshen said. "They need to be restored to full staffing just to be able to produce (reports), and then they need extra funding for the modernization that's too long neglected."

This story is developing and will be updated.

The-CNN-Wire

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