Budget constraints and workforce cuts have taken a toll on the Labor Department’s production of economic data. And that was before President Donald Trump fired the head of the Bureau of Labor Statistics.
Now, with the agency’s leadership in doubt, efforts to modernize and improve the quality of vital reports on unemployment and inflation may also be under threat.
Trump has repeatedly claimed without evidence that BLS “rigged” economic data to make his administration and Republicans look bad. He said late Sunday he planned to name a replacement for former Commissioner Erika McEntarfer later this week.
The agency has spent decades building up firewalls from political interference to preserve the public’s confidence in its economic reports. But it also faces massive challenges caused in part by years of declining survey response rates and a hiring freeze imposed by the Trump administration that have raised questions about the quality of its work. And whoever Trump selects as its next leader will have to try to address thorny data-collection issues as he or she rebuilds trust in an institution put in the partisan hotseat.
“People will be more skeptical of any changes introduced, even when those changes are appropriate,” said Erica Groshen, who led the statistical agency during the Obama administration. “That will be problematic.”
Absent an infusion of resources, the next commissioner “can have all the best intentions in the world,” Groshen added. “They’re not going to be able to do any more than the BLS was doing before.”
Top economists and agency alums have warned for years that BLS was in need of a revamp and more funding to ensure it remains a trusted resource for measuring nearly all aspects of the U.S. economy, from the unemployment rate to how much American men spend each year on clothing.
Those economic gauges, particularly when it comes to employment and inflation, are critical to Federal Reserve policymakers, Wall Street traders and business leaders who rely on their accuracy to plan ahead.
Most economists believe federal statistical agencies like BLS are still the gold standard for producing timely and accurate economic reports.
“We rely on BLS to do a lot of stuff, and we don’t give it the resources to do that stuff,” said Michael Strain, director of economic policy studies at the right-leaning American Enterprise Institute.
Firing McEntarfer was “completely inappropriate,” he added. “Whatever the circumstances, it’s imperative the president nominate someone perceived to be independent of him and the White House.”
Fed Chairman Jerome Powell also frequently praises the quality of U.S. economic data, but in a June appearance before the House Financial Services Committee, he warned of “very mild degradation of the scope of the surveys.”
“The direction of travel is something I’m concerned about,” he said. “I don’t like to see the kind of stories I’m reading, the idea being that the data is going to become more volatile and less reliable.”
The quality of that data has shown growing signs of strain since Trump returned to the White House.
Trump’s federal hiring freeze has made it harder for the bureau to restaff its data collection and processing teams, even though key BLS positions were excluded from DOL’s buyout offer. The bureau has eliminated hundreds of indices that measure wholesale prices, and BLS stopped collecting data in smaller markets like Provo, Utah, and Buffalo, N.Y. In the rest of the country, the number of price inputs used to calculate the consumer price index — one of the primary gauges for inflation — has declined by about 15 percent.
“I don’t know how you address that because you’re not allowing them to hire people to replace the attrition,” said Omair Sharif, president of the firm Inflation Insights. “This person coming in has got a huge, huge challenge because they’re starting off behind the eight-ball from a credibility perspective.”
The White House has terminated voluntary boards that had advised the agency on statistical methodology and how economic changes could affect data-collection efforts and analysis. And Trump’s budget proposes transferring BLS over to the Commerce Department, bundling it with two other statistical agencies.
That worrisome trend has dovetailed with a yearslong drop in response rates that accelerated after the pandemic — putting into question the effectiveness of such a foundational methodology for BLS. Potential solutions — including shifts that would allow participants to self-administer a key survey used to measure unemployment — are underway. But Trump’s heavy-handed reaction to a negative jobs report risks undercutting that progress, said Susan Houseman, a senior economist at the Upjohn Institute for Employment Research who had previously chaired the agency’s Technical Advisory Committee.
“Criticizing — with no basis — the BLS and other statistical agencies for fabricating numbers can have very bad effects on response rates,” she said. “This kind of talk really can damage that and further undermine data quality.”
To be sure, resource constraints predate Trump. One White House official granted anonymity to speak frankly about the administration’s thinking said that the BLS has had “clear problems with the reliability and accuracy of its employment statistics since the start of Covid.”
A Labor Department official granted anonymity to describe what contributed to McEntarfer’s ouster told POLITICO that agency leadership was repeatedly kept in the dark about cutbacks BLS made due to financial constraints and did not respond to offers to find solutions.
BLS has also made several unforced errors in recent years that gave Trump and other critics a foothold to claim that it is no longer living up to its reputation.
For instance, a staffer operated an unsanctioned email list to respond to inquiries from a set of “super users,” which the agency shut down after some on Wall Street caught wind of it and complained about preferential treatment.
In May 2024, some consumer price index and wage data was inadvertently posted prematurely. In August, a technical issue delayed the release of a different report by more than half an hour — yet several firms were able to obtain that information after requesting it directly.
A probe of these episodes initiated by then-acting Labor Secretary Julie Su determined that the mishaps were “isolated incidents” that nevertheless exposed the creakiness of BLS’ processes. The report made a series of recommendations that McEntarfer had begun to incorporate.
BLS’ handling of these situations has also been under scrutiny by DOL’s inspector general. An IG spokesperson said the office is aiming to complete an audit of BLS’ handling of embargoed economic data by November and plans to conduct a separate audit that will examine the reduced data collection and recent revisions.
Trump’s repeated claims that BLS figures were “RIGGED” to damage Republicans suggests a malign intent that undercuts administration officials’ attempts to cast McEntarfer’s ouster as a matter of incompetence.
“It’s the numbers that we’re questioning; it’s the accuracy,” Labor Secretary Lori Chavez-DeRemer said Monday on Fox Business Network. “Should we have had more information, more decision-making factors as to where these numbers came from? That’s the question.”
Whatever next steps the administration takes to modernize BLS can’t be done at the drop of a hat. It takes time, money, personnel and research for government agencies to change their statistical processes, said Jed Kolko, a former Commerce undersecretary and economist.
“An administration that was serious about improving economic statistics and modernizing the system would be investing in the statistical agencies, working hard to retain statistical experts, and would be seeking ways to engage outside experts,” he said.
