IDEXX Laboratories Announces Second Quarter Results
IDEXX Laboratories, Inc. (NASDAQ: IDXX), a global leader in pet healthcare innovation, today announced second quarter results.
'Our innovation-driven strategy delivered robust global growth in the second quarter,' said Jay Mazelsky, President and Chief Executive Officer. 'We saw exceptional momentum with IDEXX InVue Dx™ placements, exceeding expectations as veterinarians adopted this slide-free technology to streamline workflows and gain faster, more accurate clinical insights. This growth builds on the successful launch of IDEXX Cancer Dx™ in North America. Our focus on helping veterinarians gain deeper diagnostic insights to inform patient care continues to drive customer loyalty and sets a solid foundation for sustained long-term growth.'
Second Quarter Results
The Company reports revenues of $1,109 million for the second quarter of 2025, an increase of 11% as reported and 9% organic, driven by Companion Animal Group ('CAG') growth of 11% as reported and 10% organic, and Water revenue growth of 9% as reported and 8% organic.
Second quarter earnings per diluted share ('EPS') were $3.63, an increase of 49% as reported and 17% on a comparable basis, net of $0.56 EPS growth benefit from comparison to a prior year period discrete litigation expense accrual. Second quarter EPS included $0.03 per share benefit from currency changes and $0.10 per share in tax benefits from share-based compensation. Second quarter EPS also benefited by $0.07 per share from a discrete tax reserve release.
Second Quarter Performance Highlights
Companion Animal Group('CAG')
CAG revenue growth was led by CAG Diagnostics recurring revenue growth of 9% as reported and 7% organic, including 15% reported and 11% organic gains in International regions, and 6% reported and organic growth in the U.S., outpacing sector growth levels.
Additional U.S. companion animal practice key metrics are available in the Q2 2025 Earnings Snapshot accessible on the IDEXX website, www.idexx.com/investors.
Continued strong IDEXX commercial execution drove net customer gains and solid price realization while enabling our veterinary customers to increase diagnostic utilization, including benefits from recently launched IDEXX innovations, aiding expansion of CAG Diagnostics recurring revenues.
CAG Diagnostics capital instrument revenues expanded 66% as reported and 62% on an organic basis led by record quarterly instrument placements. Veterinary software, services and diagnostic imaging systems recurring and total revenues grew 9% on a reported and organic basis, led by continued momentum in cloud-based software attachments and installed base.
Water
Water revenues grew 9% as reported and 8% organic for the quarter, reflecting solid organic growth across major regions, with double-digit International growth.
Livestock, Poultry and Dairy ('LPD')
LPD revenues increased 5% as reported and 3% organic for the quarter, led by commercial execution in North America and Asia Pacific.
Gross Profit and Operating Profit
Gross profits increased 12% as reported and 11% on a comparable basis. Gross margin of 62.6% increased 90 basis points as reported and 110 basis points on a comparable basis, supported by strong growth in IDEXX VetLab consumables revenue, Reference Labs productivity initiatives, and benefits from net price realization helping to offset inflationary impacts.
Operating margin was 33.6% for the quarter, higher than the prior year period by 730 basis points as reported and by 130 basis points on a comparable basis, net of ~600 basis points impact from lapping the prior year period $61.5 million discrete litigation expense accrual. Operating margin results reflect 9% operating expense decline as reported and 9% growth on a comparable basis, net of a 19% growth benefit from comparisons to the prior year period discrete litigation expense accrual. Comparable operating expense growth was driven by higher R&D spend related to advancing the Company's innovation agenda and higher sales and marketing expense aligned with commercial activities to enable new product launches and sector development.
2025 Growth and Financial Performance Outlook
The Company is updating its full year revenue growth guidance range to $4,205 million - $4,280 million, or reported growth of 7.7% - 9.7%, an increase of $90 million at midpoint. This reflects a positive adjustment of ~2% at midpoint to full year estimates for reported revenue growth, reflecting solid CAG Diagnostics recurring revenue performance, outlook for higher IDEXX inVue Dx instrument placements and revenues, and the recent weakening of the U.S. dollar aligned with the foreign currency exchange rate assumptions set forth in this earnings release. The Company is increasing its outlook for organic revenue growth to 7% - 9%, an increase of 50 basis points at midpoint, reflecting the noted operational performance benefits.
The Company updated its full year reported operating margin outlook of 31.3% - 31.6%, bringing the projected full year comparable operating profit margin expansion to 50 - 80 basis points. This outlook incorporates planned commercial expansions in select international regions in the second half, while advancing a modest commercial expansion in the U.S., to manage our growing portfolio of diagnostic solutions.
The Company updated its EPS outlook range to $12.40 - $12.76, incorporating a $0.40 increase at midpoint versus prior guidance, reflecting $0.11 benefit from operational performance, $0.09 from higher share-based compensation benefits, $0.02 net unfavorable adjustment to effective tax rate excluding share-based compensation benefits and including the release of a discrete tax reserve, and $0.22 in favorable adjustments to foreign exchange estimates. The updated EPS growth outlook is 16% - 20% as reported and 9% - 13% growth on a comparable basis.
The following table provides the Company's updated outlook for annual key financial metrics in 2025 with a comparison to the prior outlook:
The following table outlines estimates of foreign currency exchange rate impacts, net of foreign currency hedging transactions, and foreign currency exchange rate assumptions reflected in the above financial performance outlook for 2025.
Conference Call and Webcast Information
IDEXX Laboratories, Inc. will be hosting a conference call today at 8:30 a.m. (EDT) to discuss its second quarter 2025 results and management's outlook. Individuals can access a live webcast of the conference call through a link on the IDEXX website, www.idexx.com/investors. An archived edition of the webcast will be available after 1:00 p.m. (EDT) on that day via the same link and will remain available for one year. The live call also will be accessible by telephone. To listen to the live conference call, please dial 1-800-289-0462 or 1-323-794-2442 and reference passcode 595638.
2025 Investor Day
IDEXX Laboratories, Inc. will host its 2025 Investor Day on Thursday, August 14, 2025 from 8:00 am to approximately 12:00 pm (EDT). A live webcast and accompanying slide presentations will be available at www.idexx.com/investors. An archived webcast replay of the event will be available approximately one hour following the event at www.idexx.com/investors. For additional information, contact [email protected].
About IDEXX Laboratories, Inc.
IDEXX is a global leader in pet healthcare innovation. Our diagnostic and software products and services create clarity in the complex, constantly evolving world of veterinary medicine. We support longer, fuller lives for pets by delivering insights and solutions that help the veterinary community around the world make confident decisions—to advance medical care, improve efficiency, and build thriving practices. Our innovations also help ensure the safety of milk and water across the world and maintain the health and well-being of people and livestock. IDEXX Laboratories, Inc. is a member of the S&P 500 ® Index. Headquartered in Maine, IDEXX employs approximately 11,000 people and offers solutions and products to customers in more than 175 countries and territories. For more information about IDEXX, visit www.idexx.com.
Note Regarding Forward-Looking Statements
This earnings release and the statements to be made in the accompanying earnings conference call contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the Company's business prospects and estimates of the Company's financial results for future periods. Forward-looking statements are included above under '2025 Growth and Financial Performance Outlook' and elsewhere and can be identified by the use of words such as 'expects', 'may', 'anticipates', 'intends', 'would', 'will', 'plans', 'believes', 'estimates', 'projected', 'should', and similar words and expressions. Our forward-looking statements include statements relating to our expectations regarding financial performance; revenue growth and EPS outlooks; operating and free cash flow forecast; projected impact of foreign currency exchange rates and interest rates; projected operating margins and expenses and capital expenditures; projected tax, tax rate and EPS benefits from share-based compensation arrangements; projected effective tax rates, reduction of average shares outstanding and net interest expense; projected impact of tariffs; trends and other factors impacting the pet healthcare industry; net price realization improvement; IDEXX inVue Dx TM analyzer placements and revenues; timing of the international roll-out of the IDEXX Cancer Dx TM testing panel; and future product launches and menu expansions. These statements are intended to provide management's expectation of future events as of the date of this earnings release; are based on management's estimates, projections, beliefs, and assumptions as of the date of this earnings release; and are not guarantees of future performance. These forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, among other things, the matters described under the headings 'Business,' 'Risk Factors,' 'Legal Proceedings,' 'Management's Discussion and Analysis of Financial Condition and Results of Operations' and 'Quantitative and Qualitative Disclosures About Market Risk' in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 and in the corresponding sections of the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025 and June 30, 2025, as well as those described from time to time in the Company's other filings with the U.S. Securities and Exchange Commission available at www.sec.gov. The Company specifically disclaims any obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
Statement Regarding Non-GAAP Financial Measures
The following defines terms and conventions and provides reconciliations regarding certain measures used in this earnings release and/or the accompanying earnings conference call that are not required by, or presented in accordance with, generally accepted accounting principles in the United States of America ('GAAP'), otherwise referred to as non-GAAP financial measures. To supplement the Company's consolidated results presented in accordance with GAAP, the Company has disclosed non-GAAP financial measures that exclude or adjust certain items. Management believes these non-GAAP financial measures provide useful supplemental information for its and investors' evaluation of the Company's business performance and liquidity and are useful for period-over-period comparisons of the performance of the Company's business and its liquidity and to the performance and liquidity of our peers. While management believes that these non-GAAP financial measures are useful in evaluating the Company's business, this information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies.
Constant currency - Constant currency references are non-GAAP financial measures which exclude the impact of changes in foreign currency exchange rates and are consistent with how management evaluates our performance and comparisons with prior and future periods. We estimate the net impacts of currency on our revenue, gross profit, operating profit, and EPS results by restating results to the average exchange rates or exchange rate assumptions for the comparative period, which includes adjusting for the estimated impacts of foreign currency hedging transactions and certain impacts on our effective tax rates. These estimated currency changes impacted second quarter 2025 results as follows: increased gross profit growth by 0.9%, decreased gross margin growth by 20 basis points, increased operating expense growth by 0.8%, increased operating profit growth by 1.1%, decreased operating profit margin growth by 10 basis points, and increased EPS growth by 1.2%. Constant currency revenue growth represents the percentage change in revenue during the applicable period, as compared to the prior year period, excluding the impact of changes in foreign currency exchange rates. See the supplementary analysis of results below for revenue percentage change from currency for the three and six months ended June 30, 2025 and refer to the 2025 Growth and Financial Performance Outlook section of this earnings release for estimated foreign currency exchange rate impacts on 2025 projections and estimates.
Growth and organic revenue growth - All references to growth and organic growth refer to growth compared to the equivalent prior year period unless specifically noted. Organic revenue growth is a non-GAAP financial measure that represents the percent change in revenue, as compared to the same period for the prior year, net of the impact of changes in foreign currency exchange rates, certain business acquisitions, and divestitures. Management believes that reporting organic revenue growth provides useful information to investors by facilitating easier comparisons of our revenue performance with prior and future periods and to the performance of our peers. Organic revenue growth should be considered in addition to, and not as a replacement of or a superior measure to, revenue growth reported in accordance with GAAP. See the supplementary analysis of results below for a reconciliation of reported revenue growth to organic revenue growth for the three and six months ended June 30, 2025. Please refer to the constant currency note above for a summary of foreign currency exchange rate impacts. Please refer to the 2025 Growth and Financial Performance Outlook section of this earnings release for estimated full year 2025 organic revenue growth for the Company and CAG Diagnostics recurring revenue growth. The percentage change in revenue resulting from acquisitions represents revenues during the current year period, limited to the initial 12 months from the date of the acquisition, that are directly attributable to business acquisitions. Revenue from acquisitions is expected to have an immaterial impact on projected full year 2025 revenue growth and no impact on CAG Diagnostics recurring revenue growth.
Comparable growth metrics - Comparable gross profit growth, comparable gross margin gain (or growth), comparable operating expense growth, comparable operating profit growth and comparable operating margin gain (or growth) are non-GAAP financial measures and exclude the impact of changes in foreign currency exchange rates and non-recurring or unusual items (if any). Please refer to the constant currency note above for a summary of foreign currency exchange rate impacts. Management believes that reporting comparable gross profit growth, comparable gross margin gain (or growth), comparable operating expense growth, comparable operating profit growth and comparable operating margin gain (or growth) provides useful information to investors because it enables better period-over-period comparisons of the fundamental financial results by excluding items that vary independent of performance and provides greater transparency to investors regarding key metrics used by management. Comparable gross profit growth, comparable gross margin gain (or growth), comparable operating expense growth, comparable operating profit growth and comparable operating margin gain (or growth) should be considered in addition to, and not as replacements of or superior measures to, gross profit growth, gross margin gain, operating expense growth, operating profit growth and operating margin gain reported in accordance with GAAP.
The reconciliation of these non-GAAP financial measures is as follows:
Projected 2025 comparable operating margin expansion outlined in the 2025 Growth and Financial Performance Outlook section of this earnings release reflects adjustments to projected 2025 operating margin expansion for: (i) an immaterial impact from year-over-year foreign currency exchange rate changes at noted exchange rates; and (ii) positive impact of the approximately $9 million discrete litigation expense accrual adjustment in the first quarter of 2025; and (iii) adjustment to full year 2024 reported operating margin expansion for the negative impact of the $61.5 million discrete litigation expense accrual adjustment in the second quarter of 2024.
These impacts described above reconcile reported gross profit growth, gross margin gain, operating expense growth, operating profit growth and operating margin gain (including projected 2025 operating margin expansion) to comparable gross profit growth, comparable gross margin gain, comparable operating expense growth, comparable operating profit growth and comparable operating margin gain for the Company.
Comparable EPS growth - Comparable EPS growth is a non-GAAP financial measure that represents the percentage change in earnings per share (diluted) ('EPS') for a measurement period, as compared to the prior base period, net of the impact of changes in foreign currency exchange rates from the prior base period and excluding the tax benefits of share-based compensation activity under ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, and non-recurring or unusual items (if any). Management believes comparable EPS growth is a more useful way to measure the Company's business performance than EPS growth because it enables better period-over-period comparisons of the fundamental financial results by excluding items that vary independent of performance and provides greater transparency to investors regarding a key metric used by management. Comparable EPS growth should be considered in addition to, and not as a replacement of or a superior measure to, EPS growth reported in accordance with GAAP. Please refer to the constant currency note above for a summary of foreign currency exchange rate impacts.
The reconciliation of this non-GAAP financial measure is as follows:
Projected 2025 comparable EPS growth outlined in the 2025 Growth and Financial Performance Outlook section of this earnings release reflects adjustments to projected full year 2025 reported EPS for: (i) estimated positive share-based compensation activity of ~$0.19; and (ii) estimated positive year-over-year foreign currency exchange rate change impact of ~$0.12 at noted exchange rates; (iii) adjustment to projected full year 2025 reported EPS for a positive $0.08 impact from the discrete litigation expense accrual adjustment in the first quarter of 2025; (iv) adjustment to full year 2024 reported EPS for a negative $0.56 impact from the discrete litigation expense accrual adjustment in the second quarter of 2024; and (v) positive impact of share-based compensation activity of $0.24.
These impacts and those described in the constant currency note above reconcile reported EPS growth (including projected 2025 reported EPS growth) to comparable EPS growth for the Company.
Segment and Other Income from Operations - We report segment income from operations in our Segment Information table below. Segment income from operations is a non-GAAP financial measure that adjusts for the impact of foreign currency transaction gains and losses and should be considered in addition to, and not as a replacement for, income from operations. We exclude foreign currency transaction gains and losses for each reportable segment (CAG, Water, and LPD) from segment income from operations and report the full amount of foreign currency transaction gains and losses in Other. We believe that reporting segment income from operations provides supplemental analysis to help investors further evaluate each reportable segment's business performance by excluding foreign currency transaction gains and losses, which are centrally managed by our corporate treasury function and which we do not consider relevant for assessing the results of each reportable segment's operations. In addition, we believe that reporting segment income from operations provides information to investors regarding key metrics that are used by management, including our chief operating decision-maker, in evaluating the performance of each reportable segment.
The reconciliation of this non-GAAP financial measure is as follows for the three and six months ended June 30, 2025 and 2024:
Free cash flow - Free cash flow is a non-GAAP financial measure and means, with respect to a measurement period, the cash generated from operations during that period, reduced by the Company's investments in property and equipment. Management believes free cash flow is a useful measure because it indicates the cash the operations of the business are generating after appropriate reinvestment for recurring investments in property and equipment that are required to operate the business. Free cash flow should be considered in addition to, and not as a replacement of or a superior measure to, net cash provided by operating activities. See the supplementary analysis of results below for our calculation of free cash flow for the three months and six months ended June 30, 2025 and 2024. To estimate projected 2025 free cash flow, we have deducted projected purchases of property and equipment (also referred to as capital expenditures) of approximately $160 million. Free cash flow conversion, or the net income to free cash flow ratio, is a non-GAAP financial measure that is defined as free cash flow, with respect to a measurement period, divided by net income for the same period. To calculate trailing twelve-month net income to free cash flow ratio for the twelve months ended June 30, 2025, we have deducted purchases of property and equipment of approximately $121 million from net cash provided from operating activities of approximately $906 million, divided by net income of approximately $986 million.
Debt to Adjusted EBITDA (Leverage Ratios ) - Adjusted EBITDA, gross debt, and net debt are non-GAAP financial measures. Adjusted EBITDA is a non-GAAP financial measure of earnings before interest, taxes, depreciation, amortization, non-recurring transaction expenses incurred in connection with acquisitions, share-based compensation expense, and certain other non-cash losses and charges. Management believes that reporting Adjusted EBITDA, gross debt, and net debt in the Debt to Adjusted EBITDA ratios provides supplemental analysis to help investors further evaluate the Company's business performance and available borrowing capacity under the Company's credit facility. Adjusted EBITDA, gross debt, and net debt should be considered in addition to, and not as replacements of or superior measures to, net income or total debt reported in accordance with GAAP. For further information on how Adjusted EBITDA and the Debt to Adjusted EBITDA Ratios are calculated, see the Company's Annual Report on Form 10-K for the year ended December 31, 2024 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.
Notes and Definitions
Discrete litigation expense accrual - During the second quarter of 2024, the Company increased its previously established $27.5 million accrual related to a now-concluded litigation matter by $61.5 million. During the first quarter of 2025, the Company reduced this previously established $89.0 million accrual by approximately $9 million, resulting in a total accrual for this now-concluded litigation matter of approximately $80 million as of March 31, 2025, which represented our best estimate of the amount of the loss.
Now-concluded litigation matter - The Company was a defendant in a litigation matter involving an alleged breach of contract for underpayment of royalty payments made from 2004 through 2017 under an expired patent license agreement, and the trial court ruled in favor of the plaintiff in 2020. Following appeals and in light of the appellate court's April 3, 2025 decision, on April 17, 2025, the Company paid the judgment of approximately $80 million, and the plaintiff executed a satisfaction and release of judgment, which was filed with the trial court on the same date, concluding this matter. For further information, see the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.
Discrete tax reserve release - During the second quarter of 2025, the Company released a previously-established reserve following the resolution of certain international tax audits.
View source version on businesswire.com:https://www.businesswire.com/news/home/20250801722638/en/
John Ravis, Investor Relations, 1-207-556-8155
KEYWORD: UNITED STATES NORTH AMERICA MAINE
INDUSTRY KEYWORD: CONSUMER HEALTH PETS VETERINARY ONCOLOGY
SOURCE: IDEXX Laboratories, Inc.
Copyright Business Wire 2025.
PUB: 08/04/2025 06:30 AM/DISC: 08/04/2025 06:30 AM
http://www.businesswire.com/news/home/20250801722638/en
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The calculus on potential Fed policy moves was The Jobs Number Matters First of all, it moves markets. Second, it probably has the biggest impact on monetary policy — especially as inflation has moderated and the focus of the Federal Reserve's attention has shifted to the labor market. The abrupt and large-scale downward revision in the jobs number will inevitably push the Fed towards lower interest rates sooner. And of course 'job creation' is a key political goal for all administrations. The jobs number is a report card on the government's economic performance. The trustworthiness of this number is critical. But trust depends on how reliable the numbers are. And that is where the real issue lies, where a reckoning is needed. The jobs report too often fails the reliability test. The problem is 'precision' — the lack of it. There are too many revisions, and they vary far too Many Revisions The BLS generates at least five versions of each month's jobs number. The first estimate released each month is always preliminary. It is revised the following month, and then revised again the month after that. The average adjustment after two months is about 50,000 jobs either added or subtracted from the original estimate, but often the change is much larger and may flip from positive to negative unexpectedly. In addition to the initial figure and the two monthly revisions, the BLS releases an 'annual benchmark revision' which revises the entire 12-month period ending in March. Actually, the BLS first releases a preliminary version of the benchmark in August, and then a final version the following January or February. So, the estimates for each month from April 2023 through March 2024 (the latest complete sequence) went through three estimates in the monthly cycle, and were then benchmark-revised twice more – preliminarily in August 2024, and finalized in February Revisions Jump Around Too Much One might expect the revisions to converge towards the 'true number.' But this does not seem to happen most of the time. For the most recent annual series from April 2023 through March 2024, the initial three monthly estimates were revised downward about 16% on average. Then the preliminary annual benchmark subtracted an additional 818,000 jobs – 'huge,' said The New York Times. Finally, in February of this year, the benchmark revision was itself revised one last time. The new number erased 'only' 589,000 jobs from the monthly estimates. Two observations emerge. This extended revision process itself – the fact that so many adjustments are needed, spread out over such a long period – certainly calls into question the integrity of the initial estimate at least – and it is precisely that first estimate that matters most to investors and policy-makers. The Precision Problem However, the more important flaw in the process emerges from the extreme variability or volatility of the revisions. Any measurement process strives for both accuracy and precision. They are not the same. Wikipedia puts it nicely: The jobs number revisions jump around a lot. The wide dispersion of the series of revised estimates for each particular month indicates a lack of precision in the measurement process. This can be quantified. Measuring Precision A common measure of the precision of a series of measurements is relative standard deviation or RSD (the standard deviation of the measurements as a percentage of the overall average of the measurements – also called the coefficient of variation). It is essentially the degree to which the repeated measurements differ from the mean. A standard statistical text describes it this way:What Quantified 'Precision' Means Statisticians have developed different benchmarks – expressed as maximum permissible RSD values – for different contexts. [Sources: General Mftg;Pharmaceutical Mftg;EPA; FAO; EURL; FDA;Covid] Exceeding these benchmarks triggers a range of characteristic concerns. [Sources: 1,4; 2; 3; 5,6] One expert, reflecting on personal experience, put it more colorfully. Modern industrial quality control processes are generally successful in conforming to these Levels for the BLS Jobs Numbers The BLS numbers don't make the grade. If we treat these revisions as repeated attempts to measure the same thing, we can apply the RSD as a heuristic device. If we compare the initial estimate with the third estimate two months later, the deviations are far above the levels cited as maximum safe thresholds by the sources mentioned above. In the last three years the RSD for these revisions reached 71%.The variation in the annualized benchmark figures is worse. The RSD is 95% for the revisions from 2003-2024. This is surprising since the benchmark final revision represents the fifth attempt to pin down the true number, and yet the volatility in the signal seems to Or Excuses Why does this high level of volatility occur? Two reasons are commonly given. The BLS relies on surveys of businesses and households for much of its data – but survey response rates have other words, fewer than half of those surveyed are providing a response. Eventually this must undermine data integrity. This growing nonresponse problem will also exacerbate the volatility BLS has committed to releasing the nonfarm payroll number as fast as possible. Each month's number is issued on the first Friday of the following month. Sometimes this means the release can occur on the very first day of the next month (as happened when the July 2025 numbers were issued on August 1). It is the fastest regular cycle for the production and release of any major economic indicator. It sets up what The Wall Street Journal calls 'a difficult trade-off between speed and accuracy.' The time period for data collection ranges between 10 and 16 days, and some businesses may not be able to report within that period. For example, businesses that pay employees monthly instead of biweekly may not be able to report their data ahead of the deadline. In recent cycles only about 2/3rds of businesses surveyed have been able to respond in time. The BLS seems to believe that timeliness is paramount, even though the result is an incomplete (and often half-baked?) product. Mainstream Critiques The problems cited here are well-known in the profession. Just two days before McEntarfer's firing, a bipartisan group of 88 top-tier economists, representing most of the leading universities in the U.S., as well as many former top government officials and heads of several prominent think-tanks, submitted a letter to Congress which was politely but openly critical of the BLS. An influential financial blogger agreed. In May, Science magazine addressed the subject in its lead editorial. Mohammed El-Erian, a prominent economic pundit, reviewed the furor, and acknowledged the institutional Sum Deplore all political motives, and ignore the histrionics on both sides. Stipulate, for clarity, that the data is not 'rigged.' (That would be organizationally impossible.) Allow that the firing of a career bureaucrat may have been unfair and unproductive. Discount for all of that, and you still have a half-broken system that generates grossly inadequate and misleading information on the state of the labor market – creating risks for investors and policy-makers. The theme of the non-partisan critics of the BLS is the need for modernization of its processes. It is long overdue. The Bureau of Labor Statistics is the classic Old Dog that hasn't been able to learn the New Tricks. It began gathering statistics on employment and labor conditions in the United States when Grover Cleveland was President. It is still using data collection strategies and techniques that were developed decades ago in a very different technological era, and which no longer work very well. As the economists' letter suggests, the BLS has failed to keep pace with the digital transformation of the economy – citing especially the 'advent of artificial intelligence [which] promises to revolutionize how data are both produced and consumed.' 'Revolutionizing the BLS' is a hopeful goal – but Bureaucracy and Revolution are two words that are not generally found in the same sentence. Perhaps the impetus for change will have to come from outside rather than from within. In any case, the reckoning is timely and necessary.
