South Africa Business Mood Hits Four-Month High, Tariffs a Risk
A measure of sentiment compiled by the South African Chamber of Commerce and Industry rose to 116.7 in July from 113.2 in the previous month.
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Newsweek
12 minutes ago
- Newsweek
Trump's BLS Pick Fuels Fears of Rigged CPI, Social Security COLA Cuts
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. President Donald Trump's nomination of E.J. Antoni, a Heritage Foundation economist, to lead the Bureau of Labor Statistics (BLS) has triggered concerns over the potential politicization of key economic data—particularly the Consumer Price Index (CPI), which is used to calculate Social Security cost-of-living adjustments (COLA) for seniors. "Seniors should know that the COLA on their Social Security benefits is tied to the CPI," former Treasury official Bruce Bartlett posted on X this week. "If the CPI is artificially reduced, as Trump wants, your benefits will be reduced." Antoni has repeatedly described Social Security as unsustainable and has advocated for its eventual phase-out. In a 2024 radio interview, he called the 90-year-old program a "Ponzi scheme," arguing that current beneficiaries should continue receiving benefits, but future retirees should not rely on it. "Eventually you need to sunset the program," Antoni said last December. He argued that while current beneficiaries would remain protected, younger Americans should transition to private accounts. "The people who are going to retire 10, 20, even 30, or certainly 40 years from now—I'm sorry, but the program is not going to be viable at that time". Donald Trump and economist E.J. Antoni in the Oval Office after Antoni's nomination to lead the Bureau of Labor Statistics. Donald Trump and economist E.J. Antoni in the Oval Office after Antoni's nomination to lead the Bureau of Labor Statistics. The White House Even Small Data Tweaks Could Mean Billions in Cuts In an interview with Fox News Digital earlier this week, Antoni said that, if confirmed, the BLS should consider pausing the monthly jobs report because of flaws in current data collection. His proposal, along with his views on Social Security, has raised concerns about the politicization of the bureau's key statistics particularly after the president fired the previous BLS chief after a soft jobs report earlier this month. Economists consulted by Newsweek warn that underreporting inflation data—even marginally—could quietly erode retirees' purchasing power over time. "If inflation is understated, then beneficiaries will have less ability to afford the goods and services they need," said Todd Belt, professor of political management at George Washington University. Dean Baker, co-founder of the Center for Economic and Policy Research, quantified the long-term impact. "If you reduced the measured rate of inflation by 0.2–0.3 percentage points annually, then someone would be getting about 2.5 percent less in benefits after 10 years, 5 percent after 20 years and 7.5 percent after 30 years," he said. This concern extends beyond benefits. Baker noted that while a move to a lower-measuring index like the alternative known as "chained CPI" would technically require an act of Congress, "it seems the law doesn't really matter anymore." Cartons of eggs are seen for sale in a Kroger grocery store on August 15, 2022 in Houston, Texas. Egg prices steadily climb in the U.S. as inflation continues impacting grocery stores nationwide. Cartons of eggs are seen for sale in a Kroger grocery store on August 15, 2022 in Houston, Texas. Egg prices steadily climb in the U.S. as inflation continues impacting grocery stores nationwide. Brandon Bell/Getty Brian Albrecht, chief economist at the International Center for Law and Economics, added that even small distortions could be difficult to undo. "If inflation were truly 10 percent in a given year but reported as 0 percent, your check the following year would not rise at all," he said. "Even small manipulations of the data can have long-term effects that are very difficult to correct." But manipulating inflation data would not be an easy task. Albrecht pushed back on assumptions that CPI data can be easily gamed. "People dig into those numbers item by item. If you claimed everything in the basket went up 2 percent but reported CPI as 1 percent, it wouldn't add up. That scrutiny makes manipulation harder to hide." "It's just very hard to do," added Andrew Biggs, a former principal deputy commissioner at the Social Security Administration (SSA), about the prospect of manipulating inflation statistics. While the BLS could, in theory, change the methodology or sampling of the CPI-W, a subset of CPI specific to urban areas, Biggs emphasized that "outright rigging is technically demanding, especially for a political appointee working with career employees." Erica Groshen, who served as BLS commissioner under President Obama, added that such changes would require public transparency. "According to OMB Statistical Policy Directive 3, any such major changes need to be announced in advance in the Federal Register," she said. Still, the stakes are high. Groshen noted that even a 0.01 percentage point understatement of the inflation rate would reduce payments to all Social Security beneficiaries—seniors and disabled—by about $1 billion annually. Whether such changes amount to a "stealth benefit cut," she said, "depends on how it was communicated." Trust in CPI Could Erode Public and Market Confidence The CPI-W, a legacy index the measures inflation for "urban wage owners" dating back to 1972, is used only by the Social Security Administration; other agencies, including the Congressional Budget Office and the Federal Reserve, rely on the Personal Consumption Expenditures (PCE) index, which tends to show lower inflation. "The Social Security Commissioner is required to select a measure of inflation, but not necessarily the CPI-W," Biggs, the former principal deputy commissioner at the SSA, said. A screen shows stock prices on the floor of the New York Stock Exchange, Friday, Aug. 1, 2025, in New York. A screen shows stock prices on the floor of the New York Stock Exchange, Friday, Aug. 1, 2025, in New York. Yuki Iwamura/AP That distinction underscores the political and policy pressure surrounding Antoni's nomination. Critics argue that a shift in the CPI-W's methodology—if perceived as biased—could spark a crisis of credibility. "Reports like the jobs report and CPI aren't just for PR purposes—Wall Street and many markets depend on them," said Anna Tavis, academic director of the Human Capital Management Department at NYU's School of Professional Studies. She also warned that undermining the credibility of official data could drive companies toward costly private analytics. "Those alternatives won't be free." The private sector isn't the only area that could be rattled. Michael Feroli, chief U.S. economist at JPMorgan Chase, told Reuters that suspicions about manipulated CPI figures could distort the $2.1 trillion Treasury Inflation-Protected Securities (TIPS) market, which exists to protect investors from inflation. "There's real money on the line here," he said. The concerns are not just technical—they're about trust. "You have an economy operating in a different reality than the reported numbers," said Belt, the GWU professor. "That creates uncertainty, which is the enemy of good business behavior."
Bloomberg
12 minutes ago
- Bloomberg
Africa's Second-Largest Aluminum Smelter at Risk of Shutdown
Africa's second-biggest aluminum smelter may close in March after operator South32 Ltd. is yet to secure a new electricity supply agreement before the current one expires. The company's shares plunged. The Mozal plant, located outside Mozambique's capital Maputo, will no longer be viable under a proposed new tariff set to replace the existing one early next year, the company said in a letter to affected parties seen by Bloomberg and verified by the company.
Bloomberg
12 minutes ago
- Bloomberg
Namibia Sees Upside in Adopting S. Africa Planned Lower CPI Goal
Namibia's central bank sees benefits to adopting a lower inflation target proposed by the South African Reserve Bank, its governor said. Namibia's headline inflation could be lowered by 1.5 percentage points by 2028 if South Africa's plan to anchor consumer prices at 3% is adopted, with only a small drag on economic growth, Governor Johannes !Gawaxab said on Thursday.
