America is the gold standard for economic data — but that doesn’t mean it’s perfect.
In fact, the Bureau of Labor Statistics was already facing problems before President Donald Trump fired Commissioner Erika McEntarfer over Friday’s surprisingly ugly jobs report, which he claimed on Truth Social was “RIGGED in order to make the Republicans, and ME, look bad.”
The move sent shockwaves through the economic and financial world. The agencies charged with tracking the country’s economic health remain the best in the world, but they also face dire issues that could impact their long-term usefulness. However, Trump’s firing is unlikely to solve those problems.
While the president offered no evidence that the report was influenced for political purposes, and the revisions to the jobs numbers Trump criticized aren’t particularly unusual, the BLS has struggled in recent years with limited resources and declining survey response rates, raising concerns about the accuracy and quality of the economic data the Bureau publishes.
But these problems are long-term issues: the need for more funding, further modernization of its survey methods, and a shift in the behavior of the businesses and people the agencies are trying to track. It’s unlikely firing the commissioner will solve these thorny challenges.
This isn’t just a problem for academics and politicians — it impacts interest rate decisions, which, in turn, affect the cost of mortgages, credit cards, auto loans, and other types of borrowing. The monthly releases from the BLS are also critical to investors and typically move markets. They can also be useful tools for companies trying to project customer demand, plan future hiring, or just get a sense of the economy’s direction.
BLS has some problems
Beyond the numbers that draw the most investor and media attention, the BLS publishes hundreds of data series drilling down into the deep nitty-gritty details of what America’s workforce looks like and does. If you want to know how the price of groceries has changed in San Francisco, the average hourly wages of florists, or the share of men aged 25-34 with a job, the BLS is your one-stop shop. Economists widely view America’s economic statistics as the gold standard around the world, and the data are an invaluable tool for understanding the country.
Almost every report put out by the BLS and other data agencies is subject to revisions as more responses roll in. Trump’s main issue with the BLS was its revisions to previous months’ jobs data, which revealed a weaker jobs market than had been previously estimated.
The job growth numbers are based on a monthly survey of over 100,000 business establishments across the country. While it would be great to get responses from all of those companies immediately — the monthly jobs report comes out just a couple of weeks after the surveys are in the field — some take longer to respond. Those are the ones that show up in the revisions.
In this case, May’s job creation numbers were revised down by 125,000 jobs, and June’s by 133,000 for a grand total of 258,000 fewer jobs created over those two months than initially thought. It takes those reports from moderately encouraging to concerning when it comes to the health of the job market. While we’ve recently had a run of downward revisions, it’s not incredibly unusual.
Indeed, Ernie Tedeschi, Director of Economics at the Yale Budget Lab, pointed out on X that the magnitude of those revisions, adjusted by overall employment, has tended to decline over the last several decades as data collection has improved.
However, fewer businesses and households are responding to all kinds of surveys these days, whether they’re political polls or consumer satisfaction questionnaires, and the struggle to get feedback is no different for the BLS. The COVID-19 pandemic accelerated that drop in participation, and it has yet to tick back up. No matter who you are, it’s harder than ever to get someone to answer the phone or reply to an email, even if you’re the Department of Labor.
It’s not just jobs data that suffers from a lack of participation. BLS recently announced that it had to cut back on its Consumer Price Index inflation measure, including suspending data collection in a handful of cities, saying the Bureau “makes reductions when current resources can no longer support the collection effort.” Those changes could make the crucial inflation figures less accurate over time, although a recent San Francisco Fed analysis suggested that, so far, these changes haven’t overly negatively affected job or inflation data quality.
At the heart of many of these issues is a lack of resources. Funding for BLS has lagged overall federal spending; between Fiscal Year 2015 and FY 2024, the most recent for which full federal spending data is available, BLS total budgetary resource requests from Congress grew about 27%, lagging the 38% increase in total federal spending over that time, even as the cost of hiring survey collectors and buying new computers to cover an ever-growing labor force have grown. Adjusting for inflation using the CPI, the 2024 budget was down about 4% from the 2015 level.
Budget requests for the 2025 and 2026 fiscal years show a sharp decline from higher levels in the last few years:
BLS is aware of many of the issues surrounding its data. A 2023 blog post noted that the Bureau has been undertaking various efforts to modernize data collection, such as opening up more video- and web-friendly options to reply to surveys and incorporating third-party price data on items like gasoline into the CPI figures.
Meanwhile, it would be very difficult for the BLS data to be “rigged” by anyone, including the Commissioner. Large numbers of statisticians and economists are involved in independently collating and analyzing the data. The Bureau is also quite transparent about publishing its methods and underlying data that lead to the topline numbers. Any tampering would likely be quickly discovered by independent economists and researchers. After all, you can just email the BLS and they will answer almost any question you have — we know because we do it all the time.
BLS is a prized gem of the economic world, even if it’s imperfect. In a world where it has become increasingly hard to get people to pick up the phone or businesses to file voluntary paperwork, there are some real challenges about the way the agency helps Americans understand the economy we live in. But firing its leader may not do much to fix those imperfections.
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