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Irish Times
3 days ago
- Business
- Irish Times
Trump's answer to negative economic news: Sack the statistician
Imagine a scenario where an authoritarian taoiseach sacks the head of the Central Statistics Office (CSO) for publishing negative data about the economy? It might seem like the plotline of a flimsy Netflix drama but that's exactly what played out in the US last week. Hours after the release of the Bureau of Labor Statistics's (BLS) latest monthly employment numbers, which pointed to a marked slowdown in the jobs market there, President Donald Trump ordered his officials to sack the bureau's chief Erika McEntarfer. He claimed, without evidence, that McEntarfer, a qualified economist of some standing (she has a PHD in economics from Virginia Tech), manipulated the data to make him look bad. READ MORE Her report indicated that the US economy generated 73,000 additional jobs in July, fewer than economists had expected, and that the economy had added 258,000 fewer jobs in May and June than the bureau had initially reported. These large downward revisions, signs perhaps that US firms have begun to slow hiring in response to tariffs, fly in the face of Trump's claim that the US economy is booming. McEntarfer's data had been 'RIGGED in order to make the Republicans, and ME, look bad,' Trump said on Truth Social. 'Important numbers like this must be fair and accurate, they can't be manipulated for political purposes,' he said. Trump's economic adviser Kevin Hassett told Fox News that 'data can't be propaganda', again without providing reasons why McEntarfer and the 40 BLS statisticians that compile the report would cook the books. Trump and his team never questioned the figures when in previous months they were positive. 'GREAT JOB NUMBERS, STOCK MARKET UP BIG! AT THE SAME TIME, BILLIONS POURING IN FROM TARIFFS!!,' he posted after the BLS's June numbers. Delivering bad news to those of an autocratic bent is tricky. Remember the Chinese doctor who tried to warn about a rapidly spreading Sars-like virus emanating from Wuhan back in 2020? Li Wenliang was initially warned by Chinese police to 'stop making false comments' and later investigated for 'spreading rumours'. He eventually fell victim to the disease himself before being posthumously lauded by the regime as a hero, a familiar arc in dictatorships. The US's 141-year-old BLS, which employs more than 2,000 staff, is one of the US federal government's chief statistical agencies and its monthly jobs numbers, typically published on the first Friday of every month, are among the most picked-over data sets. Trump claims the bureau's methodology for collecting data via phone surveys and questionnaires (similar to how the CSO here compiles its quarterly Labour Force Survey) is antiquated and political. Poor survey responses, particular in the wake of Covid, has made these reports more challenging to compile. Trump has often tried to discredit facts inconvenient to his narrative. That doesn't exactly single him out as a politician. But his conspicuous attempt to interfere with impartial economic data is a dangerous development. Since the 1970s the Fed has acted independently of government and this separation of powers is viewed as sacrosanct. If Trump snaps this independence, he will provoke another confrontation with markets Many see it as a prelude to a more combustible showdown with Federal Reserve chief Jerome Powell , who has become the president's chief bugbear. Powell has been resisting pressure from the White House to cut interest rates, eliciting a steady stream of invective in the process. Trump has called him a 'loser' and 'a stubborn MORON'. Trump believes rate cuts will lead to stronger growth and lower debt-servicing costs while cushioning the impact of tariffs and he argues there is virtually no inflation to justify keeping rates elevated. But Powell has been warning that Trump's trade policies risk reigniting inflation and therefore complicate the path for US interest rates. In contrast to the European Central Bank it has left its benchmark lending rates unchanged since December. Shortly after Trump sacked McEntarfer, Federal Reserve governor Adriana Kugler announced she was stepping down several months before her term ends. The opening on the Fed's policy-setting board paves the way for Trump to appoint someone to that role who could eventually take over from Powell, who is due to step down in May next year. ''Too Late' Powell should resign, just like Adriana Kugler, a Biden Appointee, resigned,' Trump said. 'She knew he was doing the wrong thing on Interest Rates. He should resign, also!' Since the 1970s the Fed has acted independently of government and this separation of powers is viewed as sacrosanct. If Trump snaps this independence, he will provoke another confrontation with markets. The president says he will shortly announce his pick for the open seat on the Fed's board, his de facto candidate to succeed Powell. 'It'll be one of four people,' Trump said, adding that he considered both Hassett and former Fed governor Kevin Warsh as 'very good' possibilities. Either way, the McEntarfer controversy obscured the latest jobs numbers and the precipitous decline in activity they seemed to point to. Perhaps that was the intention all along. Whether this is the beginning of a more pronounced slowdown in the US economy on the back of Trump's trade policies, we'll have to wait and see.
Bloomberg
5 days ago
- Business
- Bloomberg
Trump Throws $2 Trillion Market Into Doubt With One Firing
A $2 trillion market for securities linked to US inflation data could be the first area of Treasuries that would crack if the US Bureau of Labor Statistics is politicized, according to bond investors. Since President Donald Trump fired BLS chief Erika McEntarfer on Friday following a jobs report that showed unemployment rising on his watch, investors have fretted that the unprecedented move could erode trust in government data. Even before Trump's outburst, questions were being raised about how long America's ' gold standard ' system for economic data could withstand his effort to centralize power by collapsing firewalls meant to protect independent agencies.
CNN
7 days ago
- Business
- CNN
Trump says the Bureau of Labor Statistics orchestrated a ‘scam.' Here's how the jobs report really works
President Donald Trump claimed without evidence that the massive revisions to the latest jobs report constituted a 'scam,' accusing one of the top overseers of government statistics of cooking the books in a vendetta against his presidency. 'In my opinion, today's Jobs Numbers were RIGGED in order to make the Republicans, and ME, look bad,' Trump said in a message on Truth Social Friday. As a result, he fired Dr. Erika McEntarfer, the commissioner of the Bureau of Labor Statistics. Trump, in a message posted to Truth Social Sunday, incorrectly claimed McEntarfer 'had the biggest miscalculations in over 50 years.' In fact, the revisions the BLS made to recent jobs reports were neither historic nor evidence of corruption. Established in 1884, the Bureau of Labor Statistics (BLS) is an independently operated body within the US Department of Labor. The Labor Secretary, a member of the president's cabinet, has oversight of the BLS, but it is run by a Senate-appointed commissioner. The BLS collects data on a number of key economic concerns and produces critical reports on a regular basis. Those include data on prices, inflation, productivity, spending, pay, workplace injuries, employment and unemployment. More than 2,000 people work for the BLS, including a number of professional economists and survey takers who regularly contact businesses and employees. The economists analyze the data and produce reports for the public and the government. The BLS collects jobs data in two separate surveys. The first is done in part with old-fashioned door knocking. Survey takers go home to home throughout the country asking people for their employment status and their demographic information. A second survey, known as the Current Employment Statistics (CES) survey, is collected from thousands of businesses and government agencies using a variety of methods: via telephone, internet surveys, and – for large corporations – through an automated data transfer. By law, participation in the CES survey is voluntary, but state laws in New Mexico, Oregon and South Carolina require businesses to produce data for the survey. A law in Puerto Rico also requires the territory's businesses to submit data to the BLS. CES survey respondents submit monthly employment, hours, and earnings data for all paid workers to the BLS from their payroll records. The data is collected for the pay period that includes the 12th of the month. BLS economists first edit the data to detect processing and reporting errors. If mistakes are detected, BLS employees contact the business for clarification. Then, BLS staff prepare the data for a monthly report by estimating America's employment, hours worked and earnings. To extrapolate the data for the entire country, BLS economists add in some educated guesswork, based on seasonal hiring trends. The BLS also smooths out the data with calculations known as seasonal adjustments to avoid huge spikes and dips in data each month. The BLS also protects the raw data and its estimates by processing them through statistical tests, so individuals can't gain access to any particular employer's data. Every month, typically on the first Friday, the BLS produces its Employment Situation Summary, known colloquially as the monthly US jobs report. The report is generated from the two surveys: The household survey provides demographic data and the unemployment rate. The business survey provides data on pay, hours worked, and the number of jobs the US economy added or subtracted. In addition to that particular month's jobs information, the report also revises up or down the previous two months' jobs totals. The BLS considers its initial jobs numbers to be preliminary when they're first published, because some respondents fail to report their payroll data by the BLS' deadline. Low survey responses can make the report more challenging to estimate. But the BLS continues to collect the payroll data as it's reported, and it revises the data accordingly. The data are also revised because of the seasonal adjustments. If the more complete data comes in well above or below the preliminary data, revisions can be exacerbated by the BLS' seasonal adjustments, which sometimes need to be recalculated. The data is revised several times: in each of the two months following the initial report, and then a preliminary annual revision in August and a final annual revision in February. The July report, issued Friday, included revisions for May and June that were historically large, but they were not unprecedented. May's jobs total was revised lower to 19,000, down from an initial estimate of 139,000 – a total revision of 120,000 jobs. For the June jobs total, the BLS on Friday said the US economy added just 14,000 jobs, down from a preliminary estimate of 147,000 – a revision of 133,000 jobs. The BLS tracks each month's revisions dating back to 1979, but the BLS introduced a new probability-based sample design for revisions in 2003. Between 1979 and 2003, the average monthly revision was 61,000 jobs. Since 2003, the average monthly revision is only a slightly more accurate 51,000 jobs. But you don't need to look so far back to find larger revisions than the ones the BLS reported over May and June. In 2020 and 2021, jobs numbers were all over the map because of the pandemic: Revisions in four months during those years were bigger than the revisions from last month's report – including the largest-ever 679,000-job revision in March 2020, attributed to particularly poor survey responses during a nationwide lockdown. There have been bigger revisions outside of the pandemic, too, including a 143,00-job revision in January 2009. Trump has complained about a preliminary annual revision that was issued in August 2024, that showed the US economy had added 818,000 fewer jobs over the past year than previously reported. Trump in a Truth Social post on Friday incorrectly called that revision a 'record': A 902,000-job revision in 2009 was larger. And the final 2024 revision, issued in February, showed that the 2024 data was overestimated by 589,000 jobs. The BLS said the difference between the initial and final annual revisions was due to information received in US tax returns. Trump also correctly noted on Friday the the BLS revised lower initial jobs totals in August and September 2024 by a combined 112,000 positions before last year's presidential election. But that revision was not out of the ordinary – several revisions were larger earlier in the year and in previous years. And October's jobs numbers, reported just days before the election, constituted the worst month for jobs since the pandemic. Many businesses and government organizations rely on the BLS data for their decision-making about investment, pay and hiring decisions. The Federal Reserve, in particular, relies on the BLS data to help guide its monetary policy and rate-setting. Federal Reserve Chair Jerome Powell last week said the entire economy relies on strong data. 'Good data helps not just the Fed, it helps the government, but also helps the private sector,' Powell said at a press conference last week. 'It's very hard to accurately capture in real time the output of a $20-plus trillion economy, and the United States has been a leader in that for 100 years, and we really need to continue that, in my view.' In June, Powell told Congress he was concerned about the 'trajectory' of weaker data. In addition to the Fed and the private sector, the BLS notes its survey data is used by the National Bureau of Economic Research to determine whether or not the economy is in a recession. It's used by the Conference Board to produce economic indexes that help companies better understand the current business cycle. And it helps the BLS produce several other reports about jobs and the economy throughout the year. Alternatives to the BLS data have proven limited. Payroll processing company ADP produces a monthly private payrolls report that fails to capture government hiring and is notoriously out of sync with the BLS report. Its inconsistencies have led economists to largely ignore the report. Other surveys, such as a layoffs report from outsourcing and placement services firm Challenger, Gray and Christmas, is sometimes instructive but far less robust than the BLS report. The BLS report has its challenges too. For example, the household survey that includes the monthly unemployment rate and demographic data is considered rather volatile because of its smaller sample size and declining response rates. But the business and government employment survey is widely considered by economists to be the gold standard. 'BLS is the finest statistical agency in the entire world, it's numbers are trusted all over the world,' former Commissioner for the Bureau of Labor Statistics William Beach told Kasie Hunt on CNN's 'State of the Union' Sunday. 'I do believe, though, that the president's attack on the commissioner and on the bureau is undermining that infrastructure, could undermine that trust over the long term,' he added.
CNN
02-08-2025
- Business
- CNN
Trump fires a senior official over jobs numbers
Donald Trump Job market EconomyFacebookTweetLink Follow President Donald Trump has fired Dr. Erika McEntarfer, the commissioner of the Bureau of Labor Statistics, whom he accused, without evidence, of manipulating the monthly jobs reports for 'political purposes.' The BLS' monthly labor report Friday showed that the US economy added only 73,000 jobs in July, far below expectations. It also sharply revised down the employment growth that had been previously reported in May and June – by a combined 258,000 jobs. After the revisions, the jobs report showed the weakest pace of hiring for any three-month period since the pandemic recession in 2020. 'In my opinion, today's Jobs Numbers were RIGGED in order to make the Republicans, and ME, look bad,' Trump said in a Truth Social post. Although the May and June jobs numbers were worse than initially believed, revisions are normal in this process. The BLS' initial monthly jobs estimates are often based on incomplete data, so they are revised twice after the initial report — followed by an annual revision every February. Additionally, BLS economists use a formula to smooth out jobs numbers for seasonal variations and that can exacerbate revisions when they fall outside economists' expectations. Trump on Friday incorrectly called the revisions a 'mistake.' 'McEntarfer said there were only 73,000 Jobs added (a shock!) but, more importantly, that a major mistake was made by them, 258,000 Jobs downward, in the prior two months,' Trump said on Truth Social. 'Similar things happened in the first part of the year, always to the negative. The Economy is BOOMING under 'TRUMP.'' Trump said McEntarfer 'faked' the jobs numbers before the election to try to boost former Vice President Kamala Harris' chances in the 2024 presidential election. 'We're doing so well. I believe the numbers were phony, just like they were before the election, and there were other times. So, you know what I did? I fired her, and you know what? I did the right thing,' Trump told reporters Friday on the South Lawn. McEntarfer was confirmed by the Senate 86-8 in January 2024 for a term of four years. CNN has reached out to McEntarfer for comment. Until Trump replaces McEntarfer, Deputy Commissioner William Wiatrowski will serve as Acting Commissioner, the administration said. Trump has previously criticized the BLS for its jobs data and revisions, and he told reporters Friday evening he's 'always had a problem with these numbers.' In 2016, during his first presidential campaign, Trump claimed that the unemployment rate was significantly higher than the BLS let on. In 2024, he accused former President Joe Biden's administration of orchestrating a cover-up, after the BLS reported that it had overcounted jobs by 818,000 over the previous 12 months. 'I was thinking about it this morning, before the numbers that came out. I said, 'Who is the person that does these numbers?' And then they gave me stats about before the election,' Trump said Friday. 'We need people that we can trust,' he added. But Trump and his administration have also praised the BLS data when it has been favorable to them. During Trump's first term, former White House Press Secretary Sean Spicer said in March 2017 that the jobs data was no longer 'phony' after the BLS issued a strong jobs report. And a month ago, current White House Press Secretary Karoline Leavitt posted on social media that the economy had beat expectations for jobs in four straight BLS labor reports. The BLS is nonpartisan, and businesses and government officials rely on the accuracy of its data to make determinations about investment, hiring, spending and all sorts of key decisions. 'It's outrageous for anyone in government to question the integrity of the BLS,' said Jason Furman, a Harvard professor and former Obama economic adviser. 'Accurate statistics are essential to the economy.' Furman doubted that replacing McEntarfer would compromise the BLS, but he said even the possibility or appearance of that notion 'would be bad.' 'Countries that have tried to fake those statistics have often ended up with economic crises as a result,' Furman said. Mark Zandi, chief economist at Moody's Analytics, said the BLS' data is at the 'highest standard,' and 'as accurate as it can be.' 'Anything that undermines that or even the perception of that high standard is deeply worrisome,' Zandi said. 'I've never seen anything even close to this.' At Moody's, Zandi said he has hired a number of former BLS economists whom he called 'fantastic.' 'They do great work,' Zandi said. 'They are critical to a well-functioning economy.' Democratic Virginia Senator Mark Warner accused Trump of working the referees. 'Firing the ump doesn't change the score,' Warner said in a statement. 'Americans deserve to know the truth about the state of the Trump economy.' But Labor Secretary Lori Chavez-DeRemer said in a post on social media that she supports replacing McEntarfer. 'A recent string of major revisions have come to light and raised concerns about decisions being made by the Biden-appointed Labor Commissioner,' Chavez-DeRemer said on X. 'I support the President's decision to replace Biden's Commissioner and ensure the American People can trust the important and influential data coming from BLS.' The BLS jobs survey is widely considered by economists to be robust. It samples more than 100,000 businesses and government agencies each month, representing roughly 629,000 individual worksites. But, as part of larger cost-cutting taking place around practically every part of Trump's government, the BLS is laying off staff — and, as a result, reducing the scope of its work. For example, the BLS posted a notice in June stating it stopped collecting data for its Consumer Price Index in three cities (Lincoln, Nebraska; Buffalo, New York; and Provo, Utah) and increased 'imputations' for certain items (a statistical technique that, when boiled down to very rough terms, essentially means more educated guesses). That worried Federal Reserve Chair Jerome Powell. In testimony before Congress in June, Powell said he believed the BLS data to be accurate, but he was upset about what could become a trend. 'I wouldn't say that I'm concerned about the data today, although there has been a very mild degradation of the scope of the surveys,' Powell said at the time, in response to a question about survey data quality. 'But I would say the direction of travel is something I'm concerned about.' This story has been updated with additional developments and context.
Yahoo
02-08-2025
- Business
- Yahoo
President Trump fires BLS commissioner after July jobs report disappoints
President Trump said in a social media post Friday afternoon that he directed members of his administration to fire Erika McEntarfer, commissioner of the Bureau of Labor Statistics, after the BLS on Friday published a July jobs report that contained what it called "larger than normal" revisions to data from May and June. The July jobs report published Friday morning showed the US economy added 73,000 jobs last month, fewer than expected, while the unemployment rate rose to 4.2%. The most notable numbers to emerge from the report, however, were downward revisions to job gains in May and June, which saw 258,000 jobs taken away from what had been initially reported. May's job gains were revised down to 19,000 from 144,000, while June's additions were cut to just 14,000 from the 147,000 initially reported. Labor Secretary Lori Chavez-DeRemer appeared to confirm McEntarfer's firing in a post on X, saying Deputy Commissioner William Wiatrowski would serve as interim head of the BLS. McEntarfer was confirmed as BLS commissioner by an 86-8 Senate vote back in January. In its release on Friday, the BLS said these revisions "result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors." As he left the White House for the weekend later Friday, President Trump repeated his charges, without providing evidence, that McEntarfer was acting politically and that her "numbers were wrong." He added that he would begin reviewing candidates for her permanent replacement soon and that he has three people in particular in mind without revealing their names. He responded to the question of whether the candidates he is focused on have labor statistics experience by saying, "I'll put someone in who's going to be honest." Economists, meanwhile, on Friday were near-unanimous in their view that July's jobs data and the revisions to May and June reflect a labor market that is far weaker than had been suggested by recent data and characterizations by some officials, notably Federal Reserve Chair Jerome Powell. "The 'solid' state of the labor market described by the FOMC earlier this week looks more questionable after the July employment report," Wells Fargo senior economist Sarah House wrote in a note Friday. Job gains over the last three months have now averaged just 35,000 after Friday's revisions. In his post on Friday, Trump accused McEntarfer and the BLS of reporting "faked" jobs numbers in the run-up to last year's election, and noted February's benchmark revision to 2024 jobs data that showed payroll growth last year was overstated by some 818,000 jobs. "Important numbers like this must be fair and accurate, they can't be manipulated for political purposes," Trump said in his post on Truth Social. "The Economy is BOOMING under 'TRUMP' despite a Fed that also plays games, this time with Interest Rates, where they lowered them twice, and substantially, just before the Presidential Election, I assume in the hopes of getting 'Kamala' elected - How did that work out? Jerome 'Too Late' Powell should also be put 'out to pasture,'" Trump added. On Wednesday, the Fed voted to keep interest rates unchanged in a range of 4.25%-4.5%. Trump has for some time called on the central bank to lower interest rates. Earlier on Friday, two members of the Federal Reserve's Board of Governors, Chris Waller and Michelle Bowman, both of whom voted to lower interest rates this week, issued statements outlining their views, citing downside risks to the labor market the Fed may be overlooking. Read more: How the Fed rate decision affects your bank accounts, loans, credit cards, and investments Waller said the Fed's "wait and see approach is overly cautious," noting that "downside risks to the labor market have increased." Bowman added in her statement that the "labor market has become less dynamic and shows increasing signs of fragility." Following Friday's jobs report, data from the CME Group showed traders pricing in an 80% chance the Fed cuts rates at its September meeting; on Thursday, those odds stood at just 37%. Trump's announcement Friday that he had directed his administration to remove McEntarfer from the BLS comes on the heels of months of speculation Trump may seek to remove Powell from his role at the Federal Reserve. The legal hurdles to removing Powell from office are considerable, and both Treasury Secretary Scott Bessent and Trump himself have said they would not seek to fire Powell, whose term is set to expire next May. A flurry of reporting earlier this month suggested plans had been drawn up by the administration to remove Powell, which Trump later shot down. Powell was first nominated as Fed chair by Trump back in 2017 and re-nominated to the post by President Biden in 2021. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
