Core Viewpoint - The upcoming annual benchmark revision of non-farm payrolls by the U.S. Bureau of Labor Statistics (BLS) is expected to result in a significant downward adjustment of employment figures, estimated to be between 600,000 to 900,000 jobs [1][2]. Group 1: Employment Data Revision - The revision will cover a 12-month period from April 2024 to March 2025, leading to a monthly employment growth adjustment of 50,000 to 75,000 jobs [1]. - The analysis by Nomura indicates that the non-farm payroll report has overestimated job growth by approximately 857,000 jobs (around 95,000 jobs per month) for the second to fourth quarters of 2024 [3]. - The QCEW data, which covers over 95% of U.S. employment, is deemed more comprehensive and accurate than monthly non-farm data, despite its delayed release [8]. Group 2: Factors Behind Data Discrepancies - The significant gap between QCEW and non-farm data is attributed to two main factors: the inability of QCEW to capture undocumented immigrant employment and potential overestimation of job growth due to the "birth-death" adjustment embedded in non-farm data [10][11]. - Historical data shows that the "birth-death" adjustment often contributes significantly to annual non-farm data revisions, suggesting that this large downward adjustment is likely related [12]. Group 3: Industry-Specific Impacts - The annual benchmark revision is expected to reveal a more concentrated distribution of employment growth across fewer industries, with significant downward adjustments anticipated in professional services, construction, information technology, and manufacturing [15]. - The proportion of industries experiencing monthly job losses has increased from 25% in March 2024 to approximately 45% by July 2025, indicating a worsening concentration of employment growth and increasing downside risks [18]. Group 4: Implications for Monetary Policy - Despite the anticipated downward revision being a dovish signal for the market, its actual impact on monetary policy is expected to be limited, as Federal Reserve officials have already anticipated this adjustment [21]. - The Fed is expected to begin a quarterly rate cut of 25 basis points starting in September, unless there is a significant increase in layoffs or severe financial stress [22].