After BLS firing, Trump leaves clean-up job to successor

Politico

19 hours ago

Fed Chairman Jerome Powell also frequently praises the quality of U.S. economic data, but in a June appearance before the House Financial Services Committee, he warned of 'very mild degradation of the scope of the surveys.'
'The direction of travel is something I'm concerned about,' he said. 'I don't like to see the kind of stories I'm reading, the idea being that the data is going to become more volatile and less reliable.'
The quality of that data has shown growing signs of strain since Trump returned to the White House.
Trump's federal hiring freeze has made it harder for the bureau to restaff its data collection and processing teams, even though key BLS positions were excluded from DOL's buyout offer. The bureau has eliminated hundreds of indices that measure wholesale prices, and BLS stopped collecting data in smaller markets like Provo, Utah, and Buffalo, N.Y. In the rest of the country, the number of price inputs used to calculate the consumer price index — one of the primary gauges for inflation — has declined by about 15 percent.
'I don't know how you address that because you're not allowing them to hire people to replace the attrition,' said Omair Sharif, president of the firm Inflation Insights. 'This person coming in has got a huge, huge challenge because they're starting off behind the eight-ball from a credibility perspective.'
The White House has terminated voluntary boards that had advised the agency on statistical methodology and how economic changes could affect data-collection efforts and analysis. And Trump's budget proposes transferring BLS over to the Commerce Department, bundling it with two other statistical agencies.
That worrisome trend has dovetailed with a yearslong drop in response rates that accelerated after the pandemic — putting into question the effectiveness of such a foundational methodology for BLS. Potential solutions — including shifts that would allow participants to self-administer a key survey used to measure unemployment — are underway. But Trump's heavy-handed reaction to a negative jobs report risks undercutting that progress, said Susan Houseman, a senior economist at the Upjohn Institute for Employment Research who had previously chaired the agency's Technical Advisory Committee.
'Criticizing — with no basis — the BLS and other statistical agencies for fabricating numbers can have very bad effects on response rates,' she said. 'This kind of talk really can damage that and further undermine data quality.'
To be sure, resource constraints predate Trump. One White House official granted anonymity to speak frankly about the administration's thinking said that the BLS has had 'clear problems with the reliability and accuracy of its employment statistics since the start of Covid.'
A Labor Department official granted anonymity to describe what contributed to McEntarfer's ouster told POLITICO that agency leadership was repeatedly kept in the dark about cutbacks BLS made due to financial constraints and did not respond to offers to find solutions.