Key Takeaways
- Trump’s nominee to lead the Bureau of Labor Statistics proposed temporarily halting publication of the monthly jobs report, although a White House spokesperson cast doubt on the idea.
- Stopping the monthly jobs report would eliminate the surprise of seeing monthly data revised by the bureau, but would leave the government and businesses in the dark about economic trends.
- Revisions are routine and usually uncontroversial, and are done to incorporate data that the BLS receives after the monthly jobs reports are published.
President Donald Trump’s nominee for top statistician has a way for the government to avoid revising its previously published data, but it would leave the government, companies, and the public in the dark about how the economy is doing.
E.J. Antoni, Trump’s nominee to lead the Bureau of Labor Statistics, recently set off a bombshell in the world of government economics statistics when he said the bureau should temporarily stop publishing its widely watched monthly Employment Situation Summary report. Antoni’s comments came after Trump fired the previous BLS chief in the wake of a jobs report Aug. 1 that included unusually large downward revisions showing job creation had virtually ground to a halt in May and June.
“Until it is corrected, the BLS should suspend issuing the monthly job reports but keep publishing the more accurate, though less timely, quarterly data,” he said in an Aug. 4 interview with FOX News, which was aired by the network the following week. “Major decision-makers from Wall Street to D.C. rely on these numbers, and a lack of confidence in the data has far-reaching consequences.”
Can You Trust The Numbers?
While the White House Press Secretary threw cold water on the idea of fewer reports this week, the idea of halting monthly jobs reports alarmed experts.
Economists and statisticians said revisions are part of a necessary compromise the government faces when reporting statistics on the world’s largest economy. As Betsey Stevenson, a former economic advisor to former president Barack Obama, noted:
“Data collection necessarily involves trade offs between 3 things: 1) Cost 2) Timeliness 3) Accuracy,” she posted on social media.
The jobs data is based on a massive survey of 121,000 businesses, analyzed by an army of statisticians, and is considered the “gold standard” of economic statistics worldwide.
How Data Revisions Work
Revisions to monthly jobs data are routine and rarely controversial. The Bureau of Labor Statistics and other statistical agencies produce regular reports at monthly and quarterly intervals and issue revisions later when more data comes in.
In the case of the BLS, the agency revises data as businesses send in late responses to their surveys. It also adds other data that sheds light on employment, such as unemployment filings and tax returns. The BLS also makes yearly revisions that include data from Social Security and other sources.
Significant revisions are more likely to happen when the economy hits an inflection point, such as when it’s diving into a recession, Mark Zandi, chief economist at Moody’s, posted on social media.
Business and government leaders rely on the monthly data, imperfect as it is, to make important decisions: the Federal Reserve, for example, uses the jobs data to set the nation’s monetary policy.
Problems Go Beyond Trump
Trump’s firing of Erika McEntarfer as BLS chief provoked backlash from liberal and conservative experts alike, including William Beach, whom Trump appointed as commissioner of the BLS during his first term.
Trump asserted the large revision was evidence McEntarfer was “cooking the books” to make him look bad. Beach and other experts said she wouldn’t have done that and couldn’t if she wanted to, based on how the BLS is structured.
“The totally groundless firing of Dr. Erika McEntarfer, my successor as Commissioner of Labor Statistics at BLS, sets a dangerous precedent and undermines the statistical mission of the Bureau,” Beach posted on X.
The controversy also highlighted the challenges the BLS has faced in producing its reports, some of them new and some of them longstanding.
For example, ever since the COVID-19 pandemic, fewer and fewer businesses have been answering the surveys that the government uses to produce the jobs report and other key economic measures. This has reduced the quality of official government data, economists at Goldman Sachs, led by Joseph Briggs, wrote in an analysis this week.
Not only that, but stagnant budgets at the BLS have reduced the agency’s ability to collect data, affecting important statistics such as the inflation rate, Briggs wrote. In recent months, statisticians at the BLS have been forced to use more and more guesswork in place of having agents go out and actually gather prices. Layoffs and hiring freezes under the Trump administration have made the problem worse.
Lower quality data could cause real-world damage, for instance by leading the Federal Reserve to make a mistake in setting its monetary policy, Briggs said.
Before Trump’s election, two unpaid expert panels, the Technical Advisory Committee and the Data Advisory Committee, had been advising the BLS on how to improve the quality of their data. Trump disbanded the panels in March.