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Indian Express
03-08-2025
- Business
- Indian Express
Sacking over hiring numbers – how Trump has undermined US data collection
US President Donald Trump on August 1 fired Erika McEntarfer, the Commissioner of the Bureau of Labor Statistics (BLS), after the agency said that non-farm payrolls – or new jobs outside of agriculture – rose by just 73,000 in July, while the numbers for the previous two months were revised downwards by more than a quarter of a million to a mere 19,000 for May and 14,000 for June. The US President did not take too kindly to the data, saying the numbers were being 'rigged' to make him and the Republican party 'look bad'. 'We need accurate Jobs Numbers. I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY,' Trump posted on Truth Social on August 1. McEntarfer's firing has been condemned by most outside the White House. The National Association for Business Economics, for instance, said the accusations against the BLS were 'unfounded' and 'threatens the long-standing credibility of our economic data infrastructure'. Staffing shortages Collecting quality data is difficult at the best of times. Surveyors all over the world, including in India, are facing the issue of lower response rates. According to the BLS, the household response rate in the Current Population Survey – which helps provide data on the labour force – has fallen from 88.3 per cent in April 2015 to 68.1 per cent in April 2025. But rising non-response rates is an issue that plagues all countries. In India, the Ministry of Statistics and Programme Implementation (MoSPI) has, for some time, been concerned by the increasing apathy of the upper class to government surveys, particularly households living in gated societies. In the US, there has been another challenge. On January 20, the Trump administration froze federal hiring, with the Department of Government Efficiency (DOGE) aggressively cutting government jobs. This has affected data collection, with the Wall Street Journal reporting in June the BLS had told some economists that staffing shortage had led to Consumer Price Index (CPI) data being collected from fewer shops starting April. 'These procedures will be kept in place until the hiring freeze is lifted, and additional staff can be hired and trained,' the BLS said. As it turns out, the BLS suspended CPI data collection in the cities of Lincoln, Nebraska and Provo, Utah in April 'to align survey workload with resource levels'. In June, data collection in Buffalo, New York was suspended, with the BLS saying on July 29 that 'roughly 15 per cent of the sample in the other 72 areas also was suspended from collection, on average'. Meanwhile, the Trump administration's spending cuts for the current fiscal would lower the budget and headcount of the BLS by around 8 per cent. According to the Council for Community and Economic Research, this would limit the ability of the BLS' to meet growing demand for sub-state and real-time labour market data. 'The agencies, BLS included, are in survival mode,' news website Politico reported in June, quoting Michael Horrigan, a former BLS Associate Commissioner. 'You can't save that money simply by cutting sampling or cutting indexes. The only way to save that kind of money is by cutting survey programs.' To get around fewer CPI data points, the BLS has been using a technique known as 'imputation'. When a product's price is missing, it is derived from that of an item in the same category and same place – or 'home cell imputation'. For example: if the BLS does not have the price of a loaf of 100 per cent whole wheat bread in a selected store in Washington, DC, then the agency estimates the price from the price change for all types of bread in the same area. And if prices for all types of bread in the area are unavailable, then the BLS would take the price from a broader region – or 'different cell imputation'. India has seen its own cases of imputation, but only in extenuating circumstances. One such instance was the Covid pandemic, when prices of several items were not available due to restrictions on movement of people and lack of transactions. As a result, MoSPI used imputation to calculate CPI inflation for April 2020 and May 2020. But from a policy perspective, the Reserve Bank of India's Monetary Policy Committee treated these two inflation numbers as a 'break' in the CPI series. The problem for watchers of US CPI data is that the BLS has been increasingly using more and more imputation over the last one year – and of the worse variety. 'Different cell imputation' – in which price data from a wider region is used to guess missing numbers – made up 35 per cent of all imputed prices in June, up from just 8 per cent in June 2024. Nothing can make up for actual data collection. Siddharth Upasani is a Deputy Associate Editor with The Indian Express. He reports primarily on data and the economy, looking for trends and changes in the former which paint a picture of the latter. Before The Indian Express, he worked at Moneycontrol and financial newswire Informist (previously called Cogencis). Outside of work, sports, fantasy football, and graphic novels keep him busy. ... Read More
RTÉ News
13-05-2025
- Business
- RTÉ News
Central Bank chief Makhlouf warns uncertainty will persist even if trade war passes
Uncertainty in the global economy is likely to persist even if a global trade war proves short-lived, European Central Bank governing council member Gabriel Makhlouf said in a speech today in Dublin. "Even if a full-blown trade war turns out to be short-lived, the uncertainty effects will persist for some time," Mr Makhlouf, the Governor of the Central Bank here, said. "Amplification risks from elevated public and private debt levels, and how these might ripple through the financial system, are a further downside risk," he added. He made his comments in a speech at the International Economic Symposium in Dublin, an event co-hosted by the Central Bank and the National Association for Business Economics. "The global economic integration that has characterised most of the last half-century is now stalled, if not reversing," the Governor also noted. He said the last few weeks have seen an acceleration in the pace and scale of change. "The sudden shift led to increased financial market volatility across the world, reminding us all of the fact that that global trading systems and global capital flows are two sides of the same coin," he stated. "As a country at Europe's western edge, but at the heart of the European Union, and indeed the euro area, Ireland plays an important role in the global financial ecosystem," he said. "We are a highly globalised economy, with a large outward-focused financial sector. We see significant capital flows through our financial system and we have been closely and carefully analysing daily trade flow data during this period of volatility," he added. Governor Makhlouf said we are facing a new global economic order characterised by trade fragmentation, structural economic shifts, more frequent supply disruptions and policy unpredictability. "Nobody welcomes the geoeconomic fragmentation we are currently experiencing, but I believe it merely serves to accelerate changes that up to recently were more gradual. To a large extent, it brings to a head decisions that, for Europe, had been put off for far too long," he concluded.
