U.S. labor-market data were sharply revised, with the Bureau of Labor Statistics cutting previously reported payroll gains for May and June by a combined 258,000 jobs. May’s figure was lowered to 19,000 from 144,000 and June’s to 14,000 from 147,000, marking the second-largest two-month downward adjustment in more than four decades. Morgan Stanley calculated that the latest changes are four to five times larger than the median revision since 1979. Separate analysis of the Quarterly Census of Employment and Wages suggests the agency could ultimately remove nearly 800,000 positions from the nine-month period ending December 2024, indicating employment may have been overstated by roughly 89,000 jobs a month. The scale of the downgrades has intensified political scrutiny. President Donald Trump on Aug. 1 dismissed BLS Commissioner Erika McEntarfer, alleging the data were manipulated, though economists cited by Goldman Sachs and others say the revisions reflect a genuine loss of hiring momentum rather than statistical tampering. Federal Reserve Governor Lisa Cook said on Wednesday that large data revisions are typical when the economy reaches inflection points, adding that officials are closely monitoring the labor market as they weigh policy. Cook also noted that advances in artificial intelligence could influence both employment and inflation, but current economic uncertainty has not slowed corporate investment in the technology.