Trump's shoot-the-messenger tactic will only hurt the economy more

CNN

11 hours ago

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We've all been there, in the middle of an objectively bad outcome, and had the same knee-jerk reaction: Blame someone else! Your team lost the big game? Ah, but the refs were clearly biased, and the coach should have taken a time out earlier, and didn't you see how the other team was cheating?
Deflect all you want, it won't change the score. That's a lesson President Trump has been unwilling to learn.
ICYMI: Trump fired the head of the Bureau of Labor Statistics on Friday because he didn't like facts on the ground it reported about the state of employment in America.
And while it's tempting to see the words 'Bureau of Labor Statistics' and think, ugh this sounds boring, stay with me. Because it's hard to overstate just how crucial it is for businesses and policymakers to have reliable labor data available — and how much Trump's actions threaten to erode a century's worth of statistical credibility that the global economy relies on.
'Credible statistics and agency independence go hand in hand,' Aaron Sojourner, a labor economist and senior researcher at the W. E. Upjohn Institute for Employment Research, told CNN on Monday. 'Attacking independence damages the credibility of the statistics.'
Just to underline the point: US federal stats are the gold standard. They are how we keep a pulse on the giant, messy force that is the world's biggest economy. If that data were to become corrupted, that's the ballgame — businesses and policy makers would be flying blind, making it much harder to prevent (or claw our way out of) a recession.
And right now, as Trump's tariffs and cuts to social spending take their toll on American consumers, we need that credible data as much as ever.
Here are the facts:
On Friday, the BLS showed that we're adding fewer jobs each month than previously estimated — just 106,000 total over the past three months (versus the roughly 150,000 each month that economists generally consider healthy).
The past three months were, if you take out the early days of Covid-19, the weakest three months of job growth since 2010.
Unemployment ticked up to 4.2% in July from 4.1% in June.
The revisions to the May and June numbers were the bigger news: May's total was revised lower to 19,000, down from an initial estimate of 139,000. In June, the economy added just 14,000 jobs, down from a preliminary estimate of 147,000.
Those revisions don't look good for Trump, who campaigned on a promise to both bring down prices and revive America's manufacturing sector.
And while it's natural for a politician to try to spin bad news or shift the blame, Trump swerved fully into the realm of conspiracy when he claimed the BLS had cooked the books to make the labor market look worse than it is.
He's not offering any evidence for that claim, because there is none. But he fired the BLS commissioner, Erika McEntarfer, anyway.
'In my opinion,' he wrote on social media Friday afternoon, the monthly jobs numbers were 'RIGGED' to make Republicans and him look bad. Later, he told reporters, 'I believe the numbers were phony.'
'My opinion' and 'I believe' are doing some heavy lifting. Because as many economists — including several who worked under Republican and Democratic administrations — have pointed out, nothing about the Friday BLS report was fishy. Even one of the White House's top economists, Stephan Miran, went on CNBC shortly after the report came out with a ho-hum analysis. The revisions to May and June numbers, Miran said, 'were not what we or anyone else wanted to see,' but the bad news could be chalked up to seasonal 'quirks' in the data.
Trump and White House economic adviser Kevin Hassett have focused their complaints on the revisions the BLS made to the job numbers for May and June. Put simply: The BLS updated its previous monthly reports based on payroll surveys that employers returned late. With more data to draw from, researchers get a more accurate picture. Revisions happen all the time, and while the May and June revisions were historically large, they weren't unprecedented.
Trump would rather the numbers simply say what he wants than face the reality that the US economy appears to be weaker today than it was when he took office in January.
The decision to fire McEntarfer 'is closer to what one expects from a banana republic than from a major democratic financial center,' wrote Harvard economist Jason Furman over the weekend. 'This is even more senseless than his other threats to fire officials like Jerome Powell, the chairman of the Federal Reserve.'
More senseless, that is, because McEntarfer doesn't directly influence US economic policy the way Powell does. Her job was to manage a team of 2,000 people who send out surveys, compile the answers, and generally take the temperature of the labor market at a steady cadence. Their job is to hold a mirror up to the economy, and report back what they see, without any spin on the ball.
If you ask a staffer at BLS whether a glass of water is half full or half empty, they'll tell you 'it's an eight-ounce glass containing four ounces of water.'
It's an old quip so foundational to the bureau's mission that they included it in the 'about us' section of its official government website.
The folks working at the bureau are not jokers or partisan hacks — they're the kids who finished statistics class in high school and thought, yeah, I'm going to do that as a job, while the rest of us let words like sine and cosine fade into the recesses of our minds along with the quadratic equation and the proper conjugations of the Spanish subjunctive tense.
That may be part of the reason Wall Street isn't freaking out (yet) over McEntarfer's firing. The BLS is a 2,000-strong technocratic institution with decades-old processes and procedures that make it hard to singlehandedly skew the data.
But, as my colleague Stephen Collinson notes, the real problems is the message her firing sends to other civic-minded bureaucrats. 'The message is that you might want that data and those conclusions to be to Trump's liking, or else.'