Beijing Braces for US Trade Deals That Seek to Shut Out China
Ahead of a July 9 deadline, US officials are deep in talks with major trading partners in Asia and Europe, pushing for new agreements that would include restrictions on Chinese content, or secure commitments to counter what Washington sees as China's unfair trade practices.
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Any erosion in the integrity of government data could complicate policymakers' view of the economy, which is undergoing major policy changes from across-the-board tariff hikes to strains in the labor market with a loss of immigrants. Last week, Federal Reserve Chair Jerome H. Powell warned lawmakers he didn't want to see a decline in the U.S.'s gold-standard statistics. 'I would not want anyone to think the data have deteriorated to a point where it's difficult for us to understand the economy,' Powell said during congressional testimony. 'But the direction of travel is concerning.' The Trump administration is also pushing to overhaul major benchmarks it calls flawed. In March, Commerce Secretary Howard Lutnick called for a change in the way economic growth is measured, though that idea has yet to move forward. At the same time, the president's budget for the fiscal year beginning Oct. 1 proposes slashing the Bureau of Labor Statistics' roughly $700 million budget by about 8 percent, a cut economists warn could further hobble the agency. These challenges could have real-world consequences beyond Washington. From Wall Street trading floors to Main Street boardrooms, businesses, investors and consumers rely on government benchmarks to make decisions about hiring, spending and borrowing. 'The statistical system is under acute stress at the moment,' said David Wilcox, a senior fellow at the Peterson Institute for International Economics and the director of U.S. economic research at Bloomberg Economics. 'These data are a critical piece of the social infrastructure, and they guide decision-making by Washington policymakers, businesses and households across the country. Without reliable data, decision-making becomes less well founded.' The White House defended the integrity of federal jobs data and credited Trump's policies for strong job growth. 'Baseless attempts to undermine confidence in BLS data does not change the fact President Trump's pro-growth economic agenda has created more than half a million jobs since he took office - job growth that will accelerate once Congress passes historic tax relief in the One Big Beautiful Bill,' said Taylor Rogers, a spokeswoman. An administration official noted that the Bureau of Labor Statistics has long acknowledged its challenges, which predate the pandemic. Over the past decade, budget constraints have forced the agency to scale back key activities like in-person visits, follow-ups, field training and travel - steps that are essential for data quality. The official also pointed out that the Labor Department protected BLS field staff from an offer for deferred resignation to safeguard its core mission, and that the current BLS commissioner was appointed by former president Biden. Economists say recent developments have only deepened their concerns. Last month, the BLS said it is surveying fewer outlets for the consumer price index - the most widely used benchmark for inflation - due to a staffing shortage in certain cities. While officials said that shouldn't affect the overall CPI, they acknowledged it could increase volatility in some of its components. Separately, the BLS had previously said it would reduce the number of households sampled for a survey that underpins the official unemployment rate and other labor-market indicators, before walking back the plan. Still, other little-noticed changes are proceeding, such as the bureau discontinuing the calculation and publishing of wholesale pricing data on hundreds of products in the producer price index. And the Trump administration earlier this year disbanded a pair of technical advisory committees that helped the government develop its data. Collectively, the moves have alarmed Democrats on Capitol Hill. A group of nine Senate Democrats, led by Arizona Sen. Ruben Gallego, warned of significant consequences if inflation data is inaccurate or incomplete - data that influences everything from cost-of-living adjustments for tens of millions of Social Security recipients to wage increases in collective bargaining agreements. 'This is not a minor administrative adjustment,' the lawmakers wrote in a letter to the heads of the Labor Department and BLS. 'Any erosion in its accuracy could reverberate across the entire U.S. economy.' 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Polls suggest the public has more trust in the accuracy of federal statistics, such as the unemployment rate, than in the federal government overall. A national poll of about 1,000 adults conducted by survey research firm SSRS found that roughly 70 percent had at least some confidence in federal statistics, compared with 51 percent who said the same about the federal government overall. Some economists are less sanguine. Mark Zandi, chief economist at Moody's Analytics, said that the quality of U.S. economic data is becoming increasingly shaky just as the country faces major shifts from trade, immigration and other policy changes - a time when better investment in data is needed. Among multiple worrying trends, he pointed to the combined 95,000 in downward revisions, announced last month, to job gains in April and March, the type of outsize revisions that could be at least partly driven by ongoing strains at the Labor Department. 'There's no smoking gun, yet, but there is smoke,' he said. Keith Hall, who served as commissioner of the Bureau of Labor Statistics during the George W. Bush and Obama administrations, said the agency had been chronically underfunded for years even though its budget is tiny by government standards. 'If you're worried about the quality of the data and issues with data accuracy, a place like BLS needs to spend a little more money, not less money,' he said. 'Cutting their budget is the wrong way to go.' Related Content Newlywed detained by ICE freed after 141 days and two deportation attempts The Met opens a dazzling wing of non-European art Appeals court seems likely to back Trump's deportations under wartime law
