In wake of the Trump firing, can we still trust federal jobs data?
Published in Business News
President Donald Trump fired the head of the Bureau of Labor Statistics in early August after weaker-than-expected job numbers, as well as revisions to past data.
Without evidence, the president alleged BLS commissioner Erika McEntarfer was producing inaccurate numbers for political purposes.
Experts say manipulating labor statistics can be difficult and McEntarfer’s temporary replacement, Bill Wiatrowski, has been described as a “BLS lifer.” A lot of financial experts have said it is unlikely Trump will be able to manipulate data in the short term.
Still, some warnings from financial writers have been ominous: Thomas Friedman of The New York Times, said the firing was “the most dangerous” thing the president had done and that it is unlikely we can now trust BLS data.
(After the Union-Tribune asked Econometer members this question, Trump nominated BLS critic E.J. Antoni for the top job. He still has to be confirmed by the Senate.)
Question: In wake of the Trump firing, can we still trust BLS data?
Economists
Alan Gin, University of San Diego
YES: The BLS employs more than 2,000 people to produce the monthly jobs reports. It would be difficult to manipulate the data, and whistleblowers would likely come forward if it was tried. The most a politically appointed commissioner could do is to try to spin the data, but that is not their role. If asked if the cup is half full or half empty, the appropriate response by the commissioner would be that “the cup can hold 8 ounces and there are 4 ounces in it.”
James Hamilton, University of California-San Diego
YES: At least for now. The BLS statistics are generated following detailed manuals and procedures that are publicly known and deeply ingrained in the habits and culture of the institution. I expect the August numbers to be produced in the same way as in July. Notwithstanding, firing Erika McEntarfer troubles me greatly. If in subsequent months there is a change in how BLS statistics get calculated, then I might have to change my answer from yes to no.
Norm Miller, University of San Diego
YES: Currently, BLS data remains trustworthy due to established checks and balances, albeit with normal revisions as new lagged information is reported. If the numbers ever appear suspiciously positive and are later proven false, confidence in the BLS will quickly erode. In that case, analysts and the public will shift to alternative sources, already utilized to some extent, like ADP, Indeed, LinkedIn, ZipRecruiter or the Conference Board for labor market data until BLS credibility is restored.
David Ely, San Diego State University
YES: The BLS staff and systems for producing quality statistics are still in place so the data are trustworthy in the near term. A bigger concern is whether BLS receives sufficient resources to modernize data collection methods and maintain staff. Continued underfunding of statistical agencies will lead to less reliable economic data. Also, if the new commissioner is seen as a partisan, some users will lose confidence in published statistics even if they are accurate.
Ray Major, economist
YES: You can trust the data as much as before — which is not much. BLS data uses a survey of around 120,000 businesses to make their projections. Large companies are better represented than small employers and gig works, which make an ever-increasing percentage of the workforce. Of the companies surveyed, roughly 65% return the survey. The methodology needs to be updated and modernized so that the extremely important data the BLS provides is as accurate as possible.
Caroline Freund, UC San Diego School of Global Policy and Strategy
NO: Trust takes years to build but can be shattered in an instant. Producing BLS data demands three essentials: technical expertise to ensure quality, independence to guard against political manipulation and sufficient resources to collect, clean and maintain the data. Now, BLS will be led by a partisan, non-expert commissioner at a time when its resources are already dwindling. My trust is broken — and it will have to be earned back.
Kelly Cunningham, San Diego Institute for Economic Research
YES: Understanding estimates are approximations of reality, we can somewhat trust when subsequent revisions are released with more complete data. Should also be aware initial estimates are preliminary numbers subject to wide variances with biases that can be manipulated. Subsequent revisions have additional, more accurate data but are quietly released months and even years later that do not receive the same amount of attention as the initial headline grabbing numbers garner and have long since passed.
Executives
Bob Rauch, R.A. Rauch & Associates
YES: BLS data informs decisions by businesses, policymakers and investors. Any perceived politicization could erode confidence in the numbers and could impact our currency status in the global markets. Revisions, especially during volatile periods, are a standard practice that reflects improved data accuracy over time. The data is compiled by hundreds of career statisticians using transparent methodologies. The methodologies remain sound, and a new commissioner will have no material influence over the numbers.
Gary London, London Moeder Advisors
NO: The firing was felony stupid and transparently political. We have now entered an era of disbelief, or, at least, agnosticism to all information coming out of the Trump administration. Therefore, by default I cannot just assume that further BLS reports are believable. There is merit to the idea that data compilation could be updated. But to achieve that, there should be a process, not a firing.
Austin Neudecker, Weave Growth
NO: Trump, without evidence, alleged political manipulation and fired the nonpartisan BLS commissioner after the agency published weak jobs numbers and downward revisions. Punishing officials because facts are unflattering degrades trust and calls future reliability into question. Even if career safeguards limit immediate tampering, the perception of potential manipulation is consequential. Analysts warn credibility has been damaged, and markets should triangulate upcoming reports with private data.
Chris Van Gorder, Scripps Health
YES: Data for BLS comes from many different experts responsible for different areas. Those statisticians are still in place. If they remain in their jobs, we should expect the data to be accurate. I hope the head of BLS will be reinstated. If not, and her replacement is not qualified — which has happened in some important federal positions of late — I would be concerned. And the market will respond accordingly.
Jamie Moraga, Franklin Revere
YES: Several nonpartisan staff members review and validate the data, with numerous contributors providing underlying information to support the numbers. BLS gathers data from multiple sources, so if numbers are changed, discrepancies should quickly surface. It’s unlikely the figures would be revised or biased for political purposes. However, BLS and the report’s reputation have taken a hit, which may cause some to question its future reliability.
Phil Blair, Manpower
NO: If you don’t like the message you don’t shoot the messenger. Going forward the president has for his own interests injected himself into a data collection process that must be kept absolutely independent.
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