Trump's firing of BLS chief may undermine public trust in jobs numbers, New Mexico economists say

Yahoo

2 days ago

Aug. 9—After President Donald Trump, angered by a weaker-than-normal monthly jobs report, fired the head of the Bureau of Labor Statistics, claiming she had distorted the numbers for political gain, the New Mexico Department of Workforce Solutions says its data was — and still is — accurate.
Economists across the state, however, warn that the move may undermine public trust in government statistics.
In a social media post Friday, Trump accused Commissioner of Labor Statistics Erika McEntarfer — appointed by former President Joe Biden to oversee the BLS report — of having "concocted" July's low job growth numbers "in order to make a great Republican Success look less stellar."
"She will be replaced with someone much more competent and qualified," Trump wrote. "Important numbers like this must be fair and accurate, they can't be manipulated for political purposes."
The report showed only 73,000 jobs added nationwide last month, fewer than economists had predicted, and included corrections to May and June's numbers that decreased the total number of jobs added in both months by a combined 258,000.
Revisions are a normal part of data collection, said Stacy Johnston, public information officer for the New Mexico Department of Workforce Solutions, where state employment data is gathered, analyzed and reported to the BLS. In June, the latest state data available, jobs grew by roughly 23,500 year over year in New Mexico.
"The Bureau of Labor Statistics revises multiple times to incorporate more data as it is collected," Johnston said. "More data means better statistics. The initial figures are not wrong; they are the best available at the time of release."
The DWS's Economic Research & Analysis Bureau, like others across the country, works with the BLS to collect data by surveying businesses for employment and wage information, and corrections are needed when some responses arrive later, Johnston said, which is standard practice across statistical agencies, including the U.S. Census Bureau.
"Because it's a statistic, there's margins of error," said Michael O'Donnell, director of the University of New Mexico's Bureau of Business and Economic Research. "This particular data series has seen revisions for forever. It just so happened that the revisions in the most recent months were bigger than normal."
Revisions to May and June's numbers brought what economists thought was job growth for those two months "down to almost nothing," said UNM Professor of Finance Reilly White.
A revision of 258,000 fewer jobs is a large one, said Christopher Erickson, economics professor at New Mexico State University. He attributes the discrepancies both to the COVID pandemic's economic disruption and to cutbacks in staff and budget at the BLS, which publishes monthly reports tracking job creation, unemployment, wages and inflation.
The Trump administration's budget proposal for the upcoming fiscal year cuts funding and staffing at the BLS by 8%. In June, the agency posted a notice on its website saying it had ceased data collection in Lincoln, Nebraska, Provo, Utah, and Buffalo, New York, due to a lack of resources.
"If you want quick and accurate, then it's going to be expensive," Erickson said.
Fewer resources increase the likelihood that any agency will produce data needing revision, said New Mexico economist Kelly O'Donnell.
"Depriving the agency of resources, and then questioning the credibility of its data is sort of a dual attack on an institution," O'Donnell said.
In her 30-year career as an analyst, O'Donnell says she's never questioned the accuracy of data coming from the BLS, save for the typical margin of error.
"It's reliable and credible data," she said, adding that having an objective source for economic data is "critical" for analysts to make informed decisions and to gauge the health of New Mexico's economy.
What may have already become questionable, according to O'Donnell and other New Mexico economists, is the public's trust in government data and the agencies that produce it.
"Is the data at this point trustworthy? The answer is yes," Erickson said. "Has people's confidence in the data been reduced because of the actions of Washington, D.C.? I say yes to that, too."
Americans are growing increasingly distrustful of the establishments around them — only 28% of U.S. adults have high confidence in major institutions like government, banks, courts and schools, compared with 43% two decades ago, according to a Gallup poll. More than two-thirds of Americans say they have little to no trust in the media.
The president publicly decrying a statistic and firing the official in charge of overseeing its collection sets a "hugely concerning precedent," White said, and he worries it could further weaken institutional trust.
"It for sure undermines people's confidence in the numbers that they see," Michael O'Donnell added.
Even when the numbers are accurate, he said, if you say they aren't enough times, "then people are just going to believe that's the case."
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