After President Donald Trump unceremoniously fired the head of the Bureau of Labor Statistics following Friday’s disappointing jobs report, criticism and condemnation have come swiftly, as economists and politicians warn that the politicization of federal statistics and the agencies that produce them erodes confidence in data that is crucial to both government and business.
“Friday’s presidential removal of Bureau of Labor Statistics (BLS) Commissioner [Erika] McEntarfer presents risks to the conduct of monetary policy, to financial stability, and to the economic outlook,” JPMorgan Chief U.S. Economist Michael Feroli wrote in a Sunday note to clients, adding that private data providers are no substitute for high-quality federal data.
Feroli noted that the $2.1 trillion market for Treasury Inflation-Protected Securities, or TIPS, depends on Consumer Price Index data from BLS. “As such, the integrity of this data is at least as important as the employment data,” he wrote. “Here, even seemingly innocuous technical changes can matter.”
In a piece for The Washington Post on Tuesday, top economic advisers to Presidents George W. Bush and Joe Biden warn that the firing “will come back to haunt Trump” given that government and business leaders rely on the data to make decisions.
Politicizing the statistics and questioning the integrity of federal workers “compromises the ability of policymakers in the executive branch, Congress and the Federal Reserve to properly analyze the state of the economy and develop the best policies to ensure prosperity,” write N. Gregory Mankiw, who led the Council of Economic Advisers under Bush, and Cecilia Rouse, who was CEA chair under Biden. “Federal statistics may seem like an arcane topic that interests only econ wonks like us. But the truth is that these statistical agencies have made it possible for business leaders and policymakers alike to analyze credible data and plan for the future. And that is something everyone should care about.”
Trump administration slams BLS: Some administration officials and GOP lawmakers have defended the move and the president’s baseless claim that the employment data was “phony” and “rigged” to make him and Republicans look bad. (Never mind that Trump and administration officials proudly touted numbers from the same agency when they told a story they liked.)
In television interviews over the weekend, Kevin Hassett, the director of the National Economic Council, claimed that BLS data has become “very unreliable” and that the size of recent revisions to the data indicate a problem that needs to be fixed. The July jobs report revised job growth for May and June sharply lower, cutting a combined 258,000 jobs from the initial numbers reported for those months, leaving a total of 33,00 jobs added over those months. The revisions were the largest in decades, excluding recessions — though one analysis shows that BLS's first estimates of payroll employment have gotten more accurate over time.
“The data can’t be propaganda,” Hassett said in an appearance on “Fox News Sunday.” “If the data aren't that good, then it's a real problem for the U.S. And right now the data are — have become very unreliable with these massive revisions over the last few years.”
When pressed repeatedly in an interview with NBC News’s “Meet the Press” for any evidence that the data was “rigged” or manipulated for political reasons, Hassett argued that “the number itself” is the evidence and that he hadn’t seen revisions like this in 40 years of following the data. He said that there have been several large revisions since the Covid-19 pandemic that could make people question the reliability of the numbers.
Kansas Republican Sen. Roger Marshall, who voted to confirm the fired BLS chief last year as part of a bipartisan 86-8 vote, said in a social media post that news reporters were missing the point. “Legacy media’s wrong on why the BLS chief was fired,” he wrote. “It’s not ‘bad numbers’ — it’s incompetence. She inflated job numbers by 800K pre-election, then missed by 250K last two months. How can the Fed make sound decisions with such flawed data? Trump was right to act.”
The White House also accused McEntarfer of a “lengthy history of inaccuracies and incompetence” and said her work “has completely eroded public trust in the government agency charged with disseminating key data used by policymakers and businesses to make consequential decisions.” The White House argued that the overly rosy initial jobs reports for May and June has enabled the Federal Reserve to hold off on cutting interest rates, counter to Trump’s stated desire for dramatically lower borrowing costs.
Defending the data: Economists and former BLS officials have defended the agency and noted that rigging the numbers would be extremely difficult. The report is compiled by a large team of economists and statisticians, and the commissioner doesn’t see the jobs data until it’s already finalized, just a couple of days before it is released to the public. Erica Groshen, the BLS commissioner from 2013 to 2017, told the Associated Press that she was told that, if asked to describe a cup as half-empty or half-full, the bureau says “it is an eight ounce cup with four ounces of liquid.”
Economists by and large also say that the revisions that have come into question reflect a process meant to ensure accuracy and transparency rather than any bias. Still, BLS has reportedly seen declining response rates to its surveys. “A decade ago, about 60% of companies surveyed by BLS responded. Now, only about 40% do,” the Associated Press reports. “And earlier this year the BLS said that it was cutting back on its collection of inflation data because of the Trump administration’s hiring freeze, raising concerns about the robustness of price data just as economists are trying to gauge the impact of tariffs on inflation.”
Some experts have suggested that the BLS data-collection processes do need updating — and that lawmakers need to invest in modernizing the agency’s methods. The AP’s Christopher Rugaber points out that a July report from the American Statistical Association said that U.S. government statistical agencies have seen an inflation-adjusted 16% drop in funding since 2009.
The bottom line: Trump said he would name a new BLS commissioner this week. “If the president's nominee to lead BLS is widely viewed as a partisan actor who will seek to bend data to the president's will, there are big stakes for markets and policy,” Axios’s Neil Irwin writes.