The Bureau of Labor Statistics (BLS) and the Institute for Supply Management (ISM) have officially responded to accusations that the massive divergence in their March service-sector employment data exposes a fundamental flaw in U.S. economic reporting.

Both agencies are pushing back against claims by top economist David Rosenberg that their widely conflicting employment reports “can’t be right.”

Counting Jobs Vs. Measuring Sentiment

The agencies told Benzinga that the massive gap—which Rosenberg dubbed the “best month” versus the “worst month” for service-sector employment—is simply a matter of differing methodologies.

Stacey Standish of the BLS Press Office noted that “procedural differences in how surveys are conducted can understandably lead to different estimates of employment.”

Kristina M. Cahill, Manager of ISM Research & Analytics, echoed this, explaining, “The two statistics are measuring different things in different ways.” While the BLS rigorously estimates the total count of jobs using employer payroll records from a large sampling frame, the ISM Services Employment Index tracks relative sentiment from a curated panel of employers.

In March, the ISM index plunged to 45.2%. Cahill clarified that this simply means “more respondents reported employment decreasing than increasing,” a dynamic she noted is entirely “different from measuring the net change in the number of payroll jobs.”

Real Headwinds Drive ISM Contraction

Despite the BLS reporting a gain of 178,000 nonfarm payroll jobs in March, ISM respondents noted significant operational pressures that curbed their appetite for hiring.

Steven Miller, Chair of the ISM PMI Business Survey Panel, noted that “respondent commentary points to caution rather than a collapse in overall demand.” The survey revealed that companies are hesitant to add labor amid efforts to be more efficient.

Specific headwinds cited by respondents included the offshoring of labor to “India and other low-cost geographies,” rising H-1B visa salaries, tariff uncertainty, and the ongoing Middle East conflict.

BLS Defends Constant Revisions

Rosenberg also questioned the credibility of the BLS data by pointing to roughly 800,000 in negative NFP revisions over the past year.

Standish defended the methodology, explaining that initial estimates are naturally subject to change. “All data are revised for up to two months from their initial release due to the ongoing receipt of sample data,” Standish stated.

Following this rolling window, the data is held constant until an annual benchmarking process reconciles the sample-based estimates with near-population counts from state unemployment insurance tax records.

How Have Markets Performed So Far In 2026?

The S&P 500 index has declined 3.52% year-to-date. Similarly, the Nasdaq Composite index was down 5.24%, and the Dow Jones tumbled 3.72% YTD.

The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 and Nasdaq 100 indices, respectively, closed higher on Tuesday. The SPY was up 0.044% at $659.22, while the QQQ advanced 0.015% to $588.59. SPY was up 2.61% and QQQ advanced 3.42% in premarket on Wednesday.

Meanwhile, Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA), fell 0.19% to close at $465.88 on Tuesday. DIA rose 2.30% in premarket on Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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