What US Jobs Did Last Summer

The US employment report for August hit the wires last Friday, and headline jobs growth blew expectations out of the water. But our interest is less with the specific monthly results and more with the summertime trend, especially considering revisions to June and July’s figures. Together, they illustrate a timeless principle: Relying on employment swings to predict the economy and markets is a mistake for investors.

August’s numbers were solid across the board. Nonfarm payrolls rose by 162,000, much higher than consensus estimates of 65,000.^[i] The unemployment rate remained unchanged at 4.1% while the labor force participation rate (LFPR) ticked up from 61.4% to 61.6%, its first monthly climb since September 2025.^[ii] Notably, nonfarm payroll employment for the prior two months was revised higher. June’s figures improved by 11,000 (from the second estimate’s 20,000 to 31,000) while July’s climbed by 44,000 (from -23,000 to 21,000).^[iii] Turns out employment in June and July combined is 55,000 workers higher than previously reported.^[iv]

Perhaps that doesn’t seem like a major revelation today. But go back to early July, when economists worried June’s initially reported 57,000 gain in nonfarm payrolls—far short of estimates of 110,000—hinted at “uncertainty” in the market.^[v] Or how July’s net job losses were “bleak” and that the labor market was “stalling again.”^[vi]

What if you saw those “weak” jobs data as a sign you needed to make investment changes? That would have been a mistake considering how other US macroeconomic data fared. US CPI inflation slowed in June and July, cooling worries about hotter prices. Real personal consumption expenditures grew over those two months, too. (Retail sales did fall -0.6% m/m in July, though volatile auto and gas sales drove most of that decline.) Both S&P Global and ISM’s services and manufacturing purchasing managers’ indexes (PMIs) topped 50 from June – August, indicating growth. And most critically for investors, the S&P 500 rose 2.1% since the start of June through Friday’s close.^[vii] All these data cover periods in the past. Some economic data points can be revised later. But employment data are subject to huge revisions and jobs data follow growth—a double-whammy.

If you thought the weak jobs data from early summer would spell season-long economic or market trouble, you would have been wrong. And then today’s report confirmed June and July’s respective estimates weren’t so poor after all. Oh no!

Note, too, this all happened alongside a steadily weakening LFPR, which experts fretted over—was it a sign of weaker demographics or seasonal swings?^[viii] Yet considering the LFPR had been falling since November last year—and US stocks are up 13.7% over that timeframe—it looks safe to conclude this isn’t a fundamental make-or-break development for markets (even if August’s LFPR uptick is an encouraging nugget).^[ix] 

This is all pretty standard for jobs data, which are continually revised, revised and revised again, long after the fact. That happened again last month, too! The BLS announced US employment in the 12 months to March 2026 is estimated to be -79,000 jobs lower than previously thought (a reduction of -0.1%).^[x] This benchmark revision is based on state unemployment office records rather than monthly survey-based results—a more precise way to calculate payrolls. To be clear, nothing nefarious is going on here, as this annual update is standard practice. The monthly estimate provides a more timely snapshot but has its limits given it is survey-based and response rates have declined. Assessing state records more accurately measures payrolls but takes more time to collect and process. For context, the recently announced -79,000 revision is less drastic than recent years—see last year’s update, which saw a downward revision of -911,000 for the 12 months through March 2025 in the preliminary estimate and -862,000 in the final—reflecting pandemic-related skew and low survey responses.^[xi]

Here, too, we won’t have the “final” figures for the 12 months to March 2026 until February 2027. Another way to think of this: If you wanted to make a jobs data-driven decision about how markets would fare between March 2025 – March 2026, you won’t have that “final” figure for nearly two years. But markets, which rose 17.8% in that 12-month window, have long since moved on.^[xii] We reckon they are too busy looking 3 – 30 months ahead to dwell on what happened in labor markets last month, this summer or last year.

This doesn’t mean we think investors should ignore the jobs report. Even the monthly estimates are chock-full of interesting information that can help square sentiment against reality. But don’t make portfolio decisions based on the most recent jobs figures. Not only are they old news when they finally become public, they are also subject to updates for a while. Stocks have long since moved on whatever the jobs numbers show.