Donald Trump’s firing of the head of the Bureau of Labor Statistics has exposed deepening fissures within a data agency vital to measuring the strength of the world’s largest economy.
The US president sacked BLS commissioner Erika McEntarfer hours after the agency on Friday published a gloomy July jobs report, saying the data had been “totally rigged” because of big downward revisions to the two previous months.
But former BLS officials and economists strongly dispute that assertion, saying Trump’s federal hiring freeze combined with years of under-investment are harming the US’s ability to produce pivotal data.
“It’s not that BLS is cooking the books; it’s that BLS is being cooked,” said David Hiles, a former senior BLS economist who left in December.
Luis Martinez, an economist at Emory University, added: “Home buyers, investors, people who are thinking of switching jobs, people who are thinking of moving to another part of the country. These numbers matter for real decisions that impact people’s lives.”
The BLS produces the monthly jobs report, which provides a reading of employment and unemployment, as well as the consumer price index, which is used for everything from setting prices in the vast market for inflation-protected Treasuries to determining rent and salary increases.
The agency also compiles less flashy series, such as those on import and export prices, which are widely used on Wall Street and by policymakers.
Despite the importance of these reports, BLS officials are struggling to fill ever-widening gaps in the data.
The BLS’s decisions earlier this year to scrap data collection in several cities has been one source of serious concern among economists.
A rising number of prices that are collated as part of the CPI report are no longer directly observed by the BLS’s field staff. This has lifted the proportion of data points in which the value of an item in one city is used to estimate another to increase to 35 per cent in June from 10 per cent at the start of 2025.
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This rise came as the BLS suspended about a fifth of its data collection in US cities for the CPI report, with the agency telling the Financial Times that it is now using new methods such as web scraping to collect some prices.
“BLS is strategically implementing new source data that replaces traditional survey collection. These categories are not affected by field resource constraints,” the agency said, adding that prices for vehicles, gasoline, telecommunications and some health services have now been “converted to non-survey sources.”
The BLS added that it “remains confident in the quality of the information we produce”.
However, Omair Sharif, founder of Inflation Insights, said the BLS’s margin of error around these estimates was “undoubtedly” growing.
The BLS has, like the UK’s Office for National Statistics, also seen response rates for several labour market surveys fall after the Covid-19 pandemic.
The flagship monthly jobs report is particularly vulnerable to revisions, such as those reported this summer, both because of falling survey response rates and its publication on the first Friday of each month — leaving little time to collate the previous month’s data.
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These issues have come at a time when the BLS is facing a funding crunch, with a Department of Labor document showing the agency is facing an 8 per cent budget cut next year.
It will also have to do its job with more than 150 fewer staff, according to the projections — something that former and current staff say is likely to worsen data standards and delays.
The Quarterly Census of Employment and Wages, a vast and detailed survey of the US labour market, is already being published with longer lag times.
Labour-intensive data collection, in particular, has become harder as the BLS’s workforce shrinks.
“The BLS is much more like a factory than most people realise,” said former BLS commissioner Erica Groshen. “For each release, there’s a strict schedule of who does what, including quality controls. So BLS needs a certain minimum amount of staff to ensure that it can get trustworthy data out on time.”
The calculation of measures such as CPI requires building-up of trust and expertise by the BLS’s army of economic assistants — the workers who collect data in the field.
“Think of pricing women’s clothing, and how much variety there is within that category,” said BLS economist Celeste Jimenez. “You need to look at the material, the country of origin. Once you do it a little over time you learn what to look for.”
Some stores will only allow prices to be collected in person or will request to speak with a specific staff member.
Economists have long held concerns that the BLS was being deprived of the resources it needed to maintain standards that had helped secure the US’s reputation as the world leader for statistics.
The Nation’s Data at Risk, an independent annual report on the health of US statistics, published on January 30, showed that in real terms the statistical agency’s funding was 18 per cent lower for fiscal year 2024 than in 2009.
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Concerns about standards at the US’s 13 statistics agencies have mounted since Trump returned to the White House and immediately set out to make aggressive cuts to federal funding and hiring.
The Federal Economic Statistics Advisory Committee, a voluntary body that advised the Department of Commerce’s statistical agencies — the Bureau of Economic Analysis and the US Census Bureau — along with the Bureau of Labor Statistics, was scrapped in January.
Former senior BLS officials said these problems had been exacerbated by a wave of senior staff opting to take advantage of the so-called Department of Government Efficiency’s (Doge) deferred resignation packages.
“There was a surge of retirements from people who would have otherwise been working for the next several years. Many of these are the ‘guild masters’ who traditionally have handed down their expertise to the next generation,” Hiles said.
“There are cases of a senior person leaving, and that person’s obvious replacement heading out the door the next month.”
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