Trump wants to install more of his own people to make US employment data more transparent and reliable

Author: Dong Jing, Wall Street Journal

Following the dismissal of the Bureau of Labor Statistics' director, the Trump administration plans a larger restructuring of the agency, installing more "in-house personnel" to ensure "more transparent and reliable" employment data. Analysts say this unprecedented move has raised market concerns about the independence and credibility of official US statistics.

On August 3, media reports indicated that White House Chief Economic Advisor Kevin Hassett stated that the dismissal of Bureau of Labor Statistics Director Erika McEntarfer was part of Trump's plan to further reform the agency, and that Trump hoped to install his own people within the BLS.

Previously, the BLS released a surprisingly dismal jobs report last Friday, following which Trump fired the director. Critics like former Treasury Secretary Larry Summers have argued that firing the head of a key government agency over data dissatisfaction is "the behavior of an authoritarian state, not a democracy." Former Bureau of Labor Statistics Director Bill Beach also warned that the move undermined the agency's independence and integrity. White House spokeswoman Taylor Rogers stated that Trump believes businesses, families, and policymakers need accurate data to make important decisions, and that he will restore America's trust in this critical data. Employment Data Collection Methods Questioned While revisions to employment data are not uncommon, the scale of this revision has drawn particular attention. Last Friday (August 1st), the U.S. Bureau of Labor Statistics significantly revised downward its previous data, slashing employment figures for May and June by 258,000 jobs, resulting in just 19,000 new jobs in May and 14,000 in June. Hassett said the scale of the revisions is a particular concern. He said that when data are "revised everywhere, some people start to question whether there's a partisan bias." Hassett attributed the large revisions to a failure to modernize data collection methods. He said he called for a review of the process as early as 2015, "concerned that the changing economy...was moving faster than they could measure it." He believes the recent large revisions prove his point, adding that "the data hasn't kept pace with the economy." The data collected by the U.S. Bureau of Labor Statistics is based on a voluntary monthly survey of 121,000 businesses and government agencies. In a typical month, about 60% of the sampled organizations respond promptly to the information requested for that month's employment report, while the majority of the remainder typically respond within the next one to two months, leading to routine revisions. Bank of America CEO Brian Moynihan also stated that these methods are "no longer as effective." Politicized Risks Raise Widespread Concerns Trump's decision to fire Erika McEntarfer, director of the Bureau of Labor Statistics, has raised concerns about the agency's independence. The agency has traditionally been seen as apolitical, and the independence of its data is crucial to market confidence.

Bill Beach, director of the Bureau of Labor Statistics during Trump's first term, said:

"This unfounded and damaging statement undermines the valuable work and dedication of the BLS staff who produce the report each month" and escalates the president's unprecedented attack on the independence and integrity of the federal statistical system."

Former Treasury Secretary Summers questioned how the data could be manipulated. He said:

"These data were compiled by a team of hundreds of people according to detailed procedures in the manual. There is no way that the head of the BLS could manipulate this number." White House spokeswoman Taylor Rogers defended Trump's actions, saying: "President Trump believes that businesses, families, and policymakers should have accurate data when making important policy decisions, and he will restore America's trust in this critical data."