The September jobs report — which was scheduled to be released last Friday — has been delayed by the U.S. government shutdown. That employment data would have provided important information about the health of the U.S. labor market at what could be an economic turning point. 

Last month, the Bureau of Labor Statistics released an annual report showing that the department had previously overestimated the number of jobs created between April 2024 and March 2025. Revisions, including this annual adjustment, are a normal part of publishing employment data, but the direction and scale of them could hint at more concerning macroeconomic problems.  

In a press conference later that month, Federal Reserve Chair Jerome Powell said that there had been an “almost predictable overcount” of jobs the past few quarters because of something called “the birth-death” model, which refers to new businesses opening (“births”) and businesses closing permanently (“deaths”). 

Business births and deaths can have a big impact on how many jobs the economy has, but they are also difficult to track in real time. 

For example, when Molly Hutton decided to close down the cat cafe she owned in Buffalo, New York, this past year, it’s not like she called the BLS to tell them she had eliminated several jobs from the economy. “Honestly, I have no idea if I was supposed to or not,” she said. “I guess I kinda figured that at the end of the year when my guy does the taxes something will happen then.”

“Multiply Molly by however many firms die in a given month, it’s just too much work to figure out exactly what happened to every single firm,” said Michael Horrigan, who worked at the BLS for 33 years and is now president of the Upjohn Institute for Employment Research.

Instead, the BLS has to estimate the jobs created and lost from businesses opening and closing and then update that data months later, once they have more information. 

The methodology is nuanced. “But the concept of it is actually quite simple,” said Horrigan. “In any given month, on average, the number of the employment from births is approximately equal to the employment from deaths.”

That assumption — that on average, jobs created from business births will cancel out jobs lost from business deaths — helps the BLS release estimates of overall job creation shortly after the month being measured ends. Those numbers are revised in later months, as more data comes in.

“Now, this breaks down when there are turning points in the economy,” said Victoria Battista, one of the BLS economists who works on the birth-death model. 

She said, in economic turning points such as the beginning of the pandemic, or the Great Recession, when more businesses were closing than opening each month, the birth-death model didn’t work as well, resulting in bigger revisions later on. 

“The fact is, it tends to underperform when the economy is at or near going into recession,” said Horrigan. 

For three years in a row now, the BLS has overestimated job creation and had to revise it down. In other words, there were probably more businesses closing than opening. 

“So, I think that one of the things that we need to pay attention to is, what does this mean about the overall state of the U.S. economy, and to what extent has it been on a weakening path over the last couple years,” said Horrigan.