Despite President Donald Trump’s dismissal of the Bureau of Labor Statistics (BLS) director, Erika McEntarfer, and accusations that employment figures are “rigged,” economists and Wall Street investors maintain the reliability of these reports. Trump claimed that the June employment figures were revised to his and the Republican Party’s disadvantage, but provided no specific evidence.
The firing of Ms. McEntarfer, who was appointed by President Joe Biden, has sparked considerable debate. William Beach, who was appointed by Trump to oversee this report, has spoken out against this action.
Economists have long considered the monthly employment figures reliable, as they often have a significant impact on stock markets and bond yields. However, recent revisions, particularly for May and June, have been substantial, with the May jobs gain revised down from 144,000 to 19,000, and June revised down from 147,000 to 14,000. According to Goldman Sachs economists, these are the largest non-recessionary revisions since 1967.
Several factors could explain these revisions. The response rate from businesses to government surveys has fallen significantly since the COVID-19 pandemic, from around 60% a decade ago to about 40% currently. This makes it difficult to gather accurate data, especially for newer companies or those facing difficulties.
Ms. Heather Boushey, a senior economic advisor to the Biden administration, suggested that focusing on these “fabricated issues” is a distraction from the actual data, which indicates a slowing economy. She noted that large negative revisions to employment figures could be a warning sign for the labor market going forward.
The Bureau of Labor Statistics (BLS) is known for being a non-political agency with staff dedicated to the accuracy of its figures. According to Associated Press reports, despite the declining survey participation, many experts still trust the data’s reliability, arguing that the BLS has robust statistical methods to compensate for these shortcomings.
