Trump Casts Doubt on Jobs Data Legitimacy

Erica Groshen, former Commissioner of the Bureau of Labor Statistics and current Senior Advisor at Cornell, discusses President Trump's firing of a Bureau of Labor Statistics Chief after last week's weak jobs data.

President Donald Trump fired the head of the Bureau of Labor Statistics hours after a report showed weak job growth, prompting outcries from economists to lawmakers and raising concerns over the integrity of the data going forward.

In a social media post Friday, Trump said he directed his team to fire Erika McEntarfer — who was appointed by Joe Biden — “IMMEDIATELY.” He went on to say that “important numbers like this must be fair and accurate, they can’t be manipulated for political purposes.”

Economists who have served under both parties were quick to jump to McEntarfer’s defense, as well as the BLS as an institution. The statistical agency is often praised both in the US and abroad for its “gold standard” statistics that are free of political influence. Many now fear that status is at stake.

Friday’s jobs report from the BLS showed payrolls increased 73,000 in July after the prior two months were revised down by nearly 260,000. In the past three months, employment growth has averaged a paltry 35,000 — the worst since the pandemic.

The BLS affirmed that McEntarfer was terminated Friday in an email to Bloomberg News. She was confirmed in January of 2024, an election year, by a vote of 86-8, with then-Senator JD Vance voting “yea.”

William Wiatrowski, deputy BLS commissioner, will serve as acting BLS chief for now, said Labor Secretary Lori Chavez-DeRemer. Her department oversees BLS. McEntarfer didn’t immediately respond to an attempt to seek contact.

While the commissioner role is appointed by the president, BLS describes its work as “independent” and “non-partisan.” Economists and statisticians say this impartiality is key to the public and market’s trust in the data, as trillions of dollars can trade on the numbers at any given time.

- Accurate, timely and trusted economic data provides the crucial underpinning of sound decision making by businesses, investors and government. The mantra from Federal Reserve Chair Jerome Powell is that the path for interest rates depends on the data.

Until now, the US numbers have been regarded as the gold standard. Friday’s firing of the head of the Bureau of Labor Statistics risk tarnishing that standard. It’s hard to depend on the data, if the data can’t be depended on.

President Donald Trump has directed his team to fire Erika McEntarfer, the commissioner of the BLS, after the July payrolls report showed job growth cooled sharply, including a miss relative to expectations for the month and unusually large downward revisions to numbers for May and June.

Without providing evidence, Trump wrote that in his opinion “today’s Jobs Numbers were RIGGED in order to make the Republicans, and ME, look bad.”

The massive revisions to May and June job counts were certainly striking. Job gains in those months were revised down by 258k.

Outside of weather events or major business cycle turning points, it’s rare for revisions to be so large. An unusually large revision, though, is a long way from proof of political meddling.

In keeping with attacks on other officials and members of the judiciary, Trump noted that McEntarfer was a political appointee of former President Joe Biden.

The clear message for his supporters — that BLS data in the past was manipulated by Democratic partisans.

The fear for everyone else — that BLS data in the future will be manipulated by Trump loyalists.

Political meddling with economic data is a problem sometimes suspected in emerging markets like China and Turkey but rarely in an advanced economy.

To be sure, the BLS has a tough statistical job, and reasonable people can quibble with their professional methods. Bloomberg Economics has flagged issues with the BLS birth-death model, which we think results in significant overstatement of new jobs created. But these are professional debates centered on developing the most accurate possible portrait of the facts, not accusations of political partisanship.

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