What economic revisions mean
for client conversations

Key takeaways:

• Economic data—especially when noisy and frequently revised—should inform portfolio decisions, not dictate them.
• Labor market trends help shape Fed policy, but they shouldn’t overshadow the value of diversification and a long-term investment perspective.

09/17/2025 – Signs of a cooling labor market are evident in many recent employment data releases: hiring is slowing, hours worked are declining, and wage growth in August eased to 3.7% year-over-year. The market reaction to these reports is understandable—especially as downward revisions to payroll data via the Quarterly Census of Employment and Wages (QCEW) have cast doubt on the strength of job growth and added to economic uncertainty.

Many advisors are now weighing whether economic dislocations are deeper than previously believed. A wide range of potential outcomes—from renewed growth to stagflation—each with its own labor market narrative, is reshaping market sentiment and influencing client outlooks.

So, what is the QCEW—and why do its revisions matter? The Bureau of Labor Statistics presents the QCEW as a comprehensive survey of employment and wages, covering over 95% of U.S. jobs. Revisions are made quarterly to provide a more accurate picture of job growth and labor market trends.

Some may view the labor market weakness as a head fake; others see it as a harbinger of recession. But interpreting the economic backdrop is more nuanced than a simple forecast. If the discord in the current cycle has shown anything over the past few years, it’s that traditional signals often fail to materialize. Economic data—especially when noisy and frequently revised—should inform, not dictate, portfolio decisions.

Because data like monthly nonfarm payrolls is frequently revised, it raises the question: is a release meaningful or just noise? Spotting key reversals in real time is notoriously difficult, which makes it even more important not to overreact to any single data point when guiding client portfolios.

Labor market trends are certainly relevant—especially in shaping Fed policy—but they shouldn’t overshadow the importance of staying diversified and maintaining a long-term perspective.

For advisors fielding questions about the recent QCEW revisions and what they might signal for future equity returns, there’s a silver lining: historically, S&P 500^® Index returns following QCEW release dates have, on average, remained positive across short-term time horizons (see accompanying chart). For clients tempted to overreact—whether to gloomy labor headlines or revised data—it’s worth reminding them of the risks of market timing. Missing just 10 of the market’s best days each year has historically meant missing out on meaningful long-term gains.   

Ultimately, building a long-term portfolio isn’t about reacting to noise—it’s about staying focused on clear goals, broad diversification, low costs, and disciplined decision-making through changing market conditions.