Undermining economic data is no way to realize Trump's vision

Los Angeles Times

a day ago

The Trump administration stands on the cusp of something potentially transformative. If President Trump succeeds in unleashing a new era of energy abundance and securing America's leadership in artificial intelligence, the economic gains will be profound. Lower energy costs, faster innovation and greater industrial dynamism would provide a powerful tailwind to American productivity and growth.
But if the president continues to treat disagreement as disloyalty — especially from vital, independent agencies such as the Bureau of Labor Statistics and the Congressional Budget Office — then Trump's second term could leave a dark mark on the country. He has been bullying the chair of the Federal Reserve for months. The president and his proxies launched nonstop attacks on the CBO during the 'One Big Beautiful Bill' debate. And now, Trump has fired the head of the statistics bureau in response to its latest jobs report.
It's ugly business. Some of these agencies are not just recordkeepers of past economic activity; they are part of the infrastructure of a modern, data-driven economy. From job seekers and entrepreneurs to homeowners and policymakers, nearly every consequential decision in modern America depends on the credibility and quality of the numbers these agencies produce. In an era shaped by artificial intelligence, energy transformation and digitized commerce, the United States needs a statistical system that is modern, agile and protected from political interference.
To be sure, these agencies are far from perfect. I have been a strong critic of many of them. The CBO's budget models rest on questionable assumptions and routinely underestimate the effects of rising debt on interest rates and investment. The office projected that the debt burden would reach 166% of GDP or higher, and yet its projection of annual inflation stays around 2% as if unaffected by the rising debt. Such projections would be laughable, if they weren't so dangerously disconnected from fiscal reality.
The Bureau of Labor Statistics also deserves criticism. The headline unemployment rate masks labor-market weakness by overlooking discouraged workers and those stuck in part-time jobs. The agency has also been slow to adapt its methods to reflect the modern economy and has struggled to capture the rise of gig work, hybrid jobs and other emerging trends. It has resisted using real-time administrative and private data that could improve the speed and accuracy of its reporting. Add to this a bureaucratic culture defined by wariness of reform, overly rigid job classifications and methodological opacity, and it's easy to see why critics on both sides of the aisle push for change.
The issue has drawn the administration's ire, however, is the bureau's increasingly erratic employment estimates followed by significant downward revisions — which the president and his allies see as evidence that the system is rigged. It's not rigged, but there is no doubt that it's broken. According to John Podhoretz at Commentary magazine, during the last 30 months 'there have been 30 revisions. ... Twenty-five of them have been downward revisions, and five of them have been upward revisions.' And some of these revisions have been extremely large. One reason the jobs reports have become less reliable is the sharp decline in the monthly employer survey response rates, which have fallen from around 60% pre-COVID to just 43% today. This drop has made it significantly harder to accurately measure employment.
Still, flaws are different from bad faith. While I am glad the administration is drawing attention to the need for reform at the bureau, it's going about it the wrong way. First, firing the commissioner, as Trump did last week, won't fix the system. Second, as Dominic Pino pointed out in National Review, Commerce Secretary Howard Lutnick recently disbanded the Federal Economic Statistics Advisory Committee, an expert advisory group that was actively working on this accuracy problem. Composed of unpaid professionals from academia and industry, the committee had been helping the bureau and other statistical agencies explore ways to improve data quality by boosting response rates — drawing on lessons from the U.K., Canada and Germany. Its elimination was not a cost-saving move but a decision that undercuts ongoing efforts to strengthen the integrity of federal economic data, even as the administration publicly expresses frustration with the quality of those same data.
Firing the head of the Bureau of Labor Statistics because the agency produced a revised — and hence more accurate — number that told an inconvenient truth won't help the administration either. The administration's political replacement may not be taken seriously, especially if employment numbers improve.
Trump wants to restore American economic dynamism. But he should begin by restoring confidence in the institutions that help measure and guide it. That means respecting their independence, even when their findings complicate his message. It also means pursuing real reform, not political retaliation, when they fall short.
Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University. This article was produced in collaboration with Creators Syndicate.