US economic data quality a worry, authorities not acting urgently enough, experts say- Reuters poll

Reuters

25-07-2025

BENGALURU, July 25 (Reuters) - Risks to the quality of official U.S. economic data - long seen as the gold standard - are worrying 89 of 100 top policy experts polled by Reuters, with most also concerned that the authorities are not addressing the issue urgently enough.
A decline in official survey participation rates and recent deep staff cuts at statistical agencies risk undermining the reliability of data that policymakers, companies and even households rely on to make decisions.
The U.S. Bureau of Labor Statistics, the principal agency for labor market and inflation data has, like other government departments, been hit by firings, resignations, early retirement and hiring freezes as part of a White House cost-cutting push.
Federal Reserve Chair Jerome Powell, who has held interest rates steady all year while keeping a close eye on whether President Donald Trump's tariffs have added to already-elevated price pressures, last month warned cutbacks could degrade key economic surveys.
Most economists in a July 11-24 Reuters poll, 89 of 100, said they were concerned about the quality of official U.S. economic data, including 41 who said they were "very concerned".
Survey respondents, who included Nobel Laureates, former policymakers, academics from top U.S. universities, and economists from major banks, consultancies and think tanks, were mainly worried about future data releases.
"I can't help but worry some deadlines are going to be missed and undetected biases or other errors are going to start creeping into some of these reports just because of the reduction in staff," Erica Groshen, BLS commissioner from 2013-2017, told Reuters.
"Another very big risk is all of the current administration's changes will make civil service employees more like political appointees .... I can't name any senator or congressperson who is a champion for federal statistics and has made supporting these agencies an important part of their agenda going forward."
When Trump took office in January, the federal civilian workforce was 2.3 million. It was nearly 260,000 civil servants lighter by end-April, according to a Reuters tally.
Estimates show BLS headcount is down at least 15%. Partly as a result, the agency is ending the calculation and publication from next month of about 350 components of the Producer Price Index, an indicator of inflation before goods reach the consumer.
A BLS spokesperson said in a statement: "Response rates to most federal surveys have been declining for many years .... In addition to outreach efforts focused on encouraging households and businesses to participate in our surveys, BLS is exploring ways to overcome response rate and limited resource challenges."
Other agencies, including the Bureau of Economic Analysis and the Census Bureau have had recent cutbacks to budgets and staff, said some sources familiar with the matter.
Asked if U.S. authorities were treating the issue of economic data accuracy with sufficient urgency, more than 80% of respondents, 71 of 87, said "no".
Some 70%, 63 of 90, also said U.S. government agencies did not have enough resources to maintain the collection and release of high-quality economic data.
"Budget cuts are coming at a time when it's getting harder and harder to run surveys. You have to sample more people and chase people down, and that's a labor-intensive effort," said Ethan Harris, former head of global economic research at Bank of America.
"People take statistical agencies for granted. So they're easy to cut because there's no lobby or special interest group that's powerful enough to protect them. I don't see any improvement going forward."
More than two-thirds of those polled, 66 of 98, also said they were worried that deteriorating statistics would hurt Fed policymaking.
A similar proportion of economists in a separate recent Reuters survey published this week said they were also concerned about the Fed's independence from political influence amid Trump's public attacks on Fed chief Powell.
"Major statistical agency ... budgets are not adequate to support ongoing production of the wide range of high-quality statistics they have traditionally released," said Karen Dynan, professor at Harvard University and former U.S. assistant secretary of the Treasury for economic policy.
"Policymakers are not prioritizing the issue enough to ensure the U.S. maintains its status as having the best statistical system in the world."
Reuters surveys published this month also showed concerns about the quality of economic data published in Britain and the accuracy of unemployment statistics in India.