S&P 500 futures edge up as BLS jobs model faces doubts

Experts flag implausible jobs report due to BLS birth–death overstatement

Some Wall Street analysts labeled the latest U.S. payrolls print implausible, pointing to statistical quirks rather than a genuine hiring surge. The debate centers on how much of the headline payroll gain reflects modeling choices rather than observed hiring.

According to Livemint, Fed Chair Jerome Powell warned that monthly job gains may be overstated by roughly 60,000, and that removing this effect could imply slight job losses since April. He linked the discrepancy to the Bureau of Labor Statistics’ birth–death model, which estimates jobs from new firm “births” and closures.

Why this matters for nonfarm payrolls credibility and revisions risk

As summarized by Wikipedia, estimated U.S. job growth for 2025 was revised down from about 584,000 to 181,000, a reduction exceeding 400,000 positions. That scale of revision raises questions about the initial signal from nonfarm payrolls and the reliability of provisional data.

As reported by Business Insider, Moody’s Analytics chief economist Mark Zandi argued that, once cumulative revisions are considered, there was effectively no net job growth from April through late 2025. He noted that January’s headline strength leaned heavily on healthcare, a concentration that challenges the idea of a broad-based rebound.

Following Powell’s remarks, some institutional research has reframed the labor-market narrative to account for potential overstatement. As noted by Moomoo, Goldman Sachs economists called that acknowledgment “the most important new piece of information” for interpreting recent data.

Immediate impact on Fed rate expectations and equity sentiment

Disputed payroll strength complicates the Federal Reserve’s policy path: if hiring is overstated and momentum is softer, rate-cut timing could shift as policymakers seek clearer confirmation of cooling rather than risking a premature pivot. As reported by Investors.com, recent sharp downward revisions and seasonal noise have already undermined confidence in preliminary prints, a backdrop that can temper equity enthusiasm after the initial headline reaction.

If subsequent revisions erase part of the reported gains, investor focus could shift from “resilient growth” to a “low hiring, low firing” stasis that implies weaker demand rather than acceleration. That in turn could keep policymakers cautious until subsequent reports clarify the trend.

At the time of this writing, S&P 500 futures were up 0.32% this morning after a flat prior close, as reported by Fortune, suggesting a tentative bid that could fade if payrolls are marked down in future revisions. The tone remains cautious amid debate over the underlying strength of employment.

How the BLS birth–death model works, in plain terms

In plain terms, the birth–death model attempts to estimate net job creation from business formations (“births”) and job losses from business closures (“deaths”). The approach nets out these flows to fill gaps in the monthly payroll estimate.

Critics argue that, in recent months, the model has overstated job creation and that the overage tends to be pared back in later revisions. Powell’s comments and the sizable backward adjustments place this component under unusual scrutiny until more definitive data arrive.