Trump routinely calls economic data ‘fake.' Here's why that's dangerous

CNN

26-01-2025

Federal economic data is one of the purest forms of infrastructure, says Erica Groshen, a former commissioner at the Bureau of Labor Statistics.
'These data keep our economy running as much as roads and bridges do,' she said.
Policymakers, businesses, organizations and other entities rely heavily on the vast trove of detailed data and long-running statistical trends to make investments and decisions — actions that ultimately affect people's livelihoods.
But that statistical infrastructure — which already has been in a precarious state in terms of funding, response rates and public trust — is now at greater risk of crumbling, warn Groshen and others.
It remains to be seen how federal statistical agencies may fare under President Donald Trump, who has criticized economic data and seeks to rollback government programs; as well as in the age of DOGE, when the newly formed Department of Government Efficiency aims to streamline large swaths of the government.
Concerns about potential cuts or changes to data — which world leaders, regulators, economists and executives have relied upon for decades — come at a time when statisticians inside and outside of the government have clamored for funding to better modernize how the critical data is collected, tabulated and disseminated.
Other researchers have told CNN that their fears are amplified (and, in some cases, realized) as to how surveys and economic data could be affected by an administration that not only questioned the legitimacy of economic figures in recent months, but also is actively shutting down some federal programs and websites that provide resources to underserved communities.
Federal data is considered the 'gold standard,' because of its longstanding reliability, quality, comprehensiveness, transparency and history, to name a few.
It's also at a crossroads.
Surveying people — one of the tried-and-true means of obtaining information — is in trouble, said William Beach, who served as BLS commissioner during Trump's first term.
'Surveys are dying,' Beach told CNN. 'And it's not a cold, it's a terminal disease.'
People are tired of taking surveys, Beach said, especially via the means the government relies upon: in-person and over the phone. Response rates have plummeted in recent years for a variety of surveys that serve as the backbone for some of the most important economic data.
'With lower response rates, our estimates are going to be more volatile, and our benchmark revisions (which typically factor in hard data sources such as tax records) are going to be greater,' Beach said.
And that volatility opens the door to criticism, he said.
'With the larger revisions and the statistical system kind of on its heels, people are taking pot shots at the data,' Beach said. 'It's very unfortunate that they're doing it, and it's being done left and right. It's not a Republican or Democrat thing. It's just politicians finding good targets.'
One of the most prominent examples of this came in August 2024, when the BLS released its preliminary benchmark revisions of employment data for the 12 months ended in March 2024. The initial estimated downward revision of 818,000 was larger than seen in the past 15 years, which spurred Trump to post that the jobs data was a 'lie' and that the Biden administration 'has been caught fraudulently manipulating job statistics.'
The revision process happens every year — and did so under Trump — and economists noted that the larger revision (which was a tiny fraction of overall employment) was due to ongoing effects from the pandemic and the subsequent immigration surge.
'Trust is mission-critical to the statistical agencies,' Groshen said. 'If you build a bridge but nobody trusts it, they don't drive over it.'
In addition to lower response rates, statistical agencies have been facing the long-term trend of declining funding, Groshen said.
In turn, the agency has become more efficient, she said; but that hasn't come without trade-offs.
'It has had to reduce some of the bandwidth that it used for contingency, resilience and modernization, because it needs to maintain the flow of the data that users depend on,' she said.
The Census Bureau has been working to modernize the Current Population Survey, which is one of two major surveys that compose the monthly jobs report and which serves as the source for the national unemployment rate. But it's also had steadily declining response rates, due to issues such as privacy concerns, cellphone-only households and respondents' availability.
The aim would be to add an online-based response component.
'To make a change like this, you have to really test it, and it's a slow, exacting process that maintains this continuity of this information over time,' she said. 'BLS and the Census Bureau have been asking for that to be funded for five years, and it hasn't been funded.'
Some of the stated plans to streamline the government present a 'huge' risk to federal data, because the statistical agencies fall into under discretionary funding, she said.
'If you're going to take a big whack at the budget, pretty much all discretionary spending would have to go, and that would include the statistical agencies,' she said.
And that would be the opposite of the desired effect, she said.
'If you want government to be efficient, how are you going to get it to be efficient if you can't measure anything; if you can't measure cause and effect; if you can't measure economic conditions so that you can target where problems are?' she said. 'If companies and governments that are making decisions have less information or worse information, their decisions are going to be worse. The economy will be less efficient. Investors won't have as good information on where to invest their money.'
Still, Groshen said, she believes there is common ground in some of the proposals floated in Project 2025, the controversial playbook for a reimagined federal government published by conservatives at the Heritage Foundation in advance of a second Trump term. The chapter on the Commerce Department included a suggestion of consolidating some statistical agencies.
'I think [the consolidation] idea has some merit done the right way, it could be very good for the statistical agencies,' said. 'I wouldn't put them under a cabinet secretary. I would put them in an independent agency headed up by the chief statistician of the US, and I would make sure their funding was secure.'
When money is short, there also could be opportunities to explore partnerships with universities on running certain surveys and programs or cutting back others, Beach said.
There are some backstops in place.
Several organizations, grassroots and otherwise, actively crawl and archive government websites — especially during times of administration changes.
One of those is the End of Term Web Archive project, which has been active since 2008. The organization aims to collect and preserve the information disseminated on the government and military domains at the end of presidential terms.
The End of Term Web Archive takes nominations for URLs to be archived, or as the organization calls it, 'seeds' for the web crawlers.
'I've checked our reports, and all of those [economic data] agencies' sites have been nominated,' James Jacobs, US government information librarian at Stanford University and EOT participant, wrote in an email response to CNN.
Noting that economic data is often collected based on legislative requirements, Jacobs said organizations such as the Census Project and the Association of Public Data Users actively track and advocate for government data at the Congressional level.
The extent to which data may be scaled back or information removed could have chilling effects for underserved communities, according to a report released last week by the UCLA School of Law's Williams Institute, which conducts research on sexual orientation and gender identity law and public policy.
Trump's executive orders that redefined 'sex' as only male and female and that eliminate diversity, equity and inclusion-focused efforts could ultimately affect the federal data involving marginalized Americans, including those within the LGBTQ+ community.
'This creates a lack of being able to understand what's going on with a very vulnerable population,' said Christy Mallory, the Williams Institute's interim executive director and legal director. 'In order to address some larger economic issues and employment issues, we need to know what's going on with sub-populations of people. It's hard to eradicate unemployment without knowing what's going on with marginalized communities, including trans people, who are disproportionately unemployed or underemployed.'
But the risk, she said, goes much deeper and ultimately can affect the health and wellbeing of Americans.
'To no longer see questions about you asked on a survey or to read about questions being rolled back has some other impact that folks don't often think about: How people feel when they're being erased,' Mallory said.