President Donald Trump fired Bureau of Labor Statistics Commissioner Erika McEntarfer on Friday after the July Employment Situation report revised May and June payroll estimates down by more than 250,000 jobs total.
Trump is a businessman who is used to paying for good data, and so he understandably was flummoxed by the BLS’s consistently overestimating initial jobs numbers, only to revise them down later. But the BLS commissioner is not a chief financial officer, and the jobs report is collected and reported by literally thousands of people. There is no way McEntarfer cooked the books.
Instead of firing McEntarfer, Trump should work with Congress to invest more in the government’s data collection capabilities so that policymakers and businesses have better numbers to work with and voters have more accurate data to hold elected officials accountable.
The monthly jobs report, usually released on the first Friday of every month, actually consists of two data sets, the Household Survey and the Establishment Survey. The Household Survey, also known as the Current Population Survey, is conducted by the Census Bureau on behalf of the BLS. It surveys a rotating panel of 60,000 households selected and recruited by the Census Bureau every month. The Establishment Survey is conducted by the BLS itself, and it contacts 122,000 businesses and government agencies monthly.
When you see the headline number, “The economy added 73,000 jobs in July,” that is coming from the Establishment Survey. When you see the headline, “Unemployment rose slightly to 4.2%,” that is from the Household Survey. And the numbers don’t always match. Sometimes, the number of jobs reported by the Establishment Survey can go up while the number of people reporting having jobs goes down in the Household Survey. In fact, that is exactly what happened in the July report.
Like political polling, both the Household Survey and the Establishment Survey have faced challenges producing accurate numbers because fewer households and businesses are responding these days, especially after COVID-19. As recently as 2013, about 90% of households surveyed by the Census Bureau completed the full survey each month. That number has fallen to 70%. For the Establishment Survey, the response rate has fallen from about 60% pre-COVID-19 to less than 45% today.
Unlike the Household Survey, the Establishment Survey updates the two previous months of data every month and then all the data once a year. On a monthly basis, the BLS is incorporating data from businesses that may have sent their response late the previous month. On a yearly basis, the BLS benchmarks its data against the Quarterly Census of Employment and Wages, which, despite its name, is not collected by the Census Bureau.
The QCEW collects actual head count and wage data from state unemployment offices nationwide. All employers covered by unemployment insurance must submit this data. From the QCEW, the BLS gets hard real numbers on employment levels nationwide. It then recalibrates the models it uses to estimate the monthly totals from the survey using this benchmark data. This was the yearly recalibration that caused an 818,000-job revision downward for August 2024. Trump argues that the initial overestimation was evidence of manipulation by McEntarfer to help his opponent, then-Vice President Kamala Harris. But the downward revision came before the election, which is hardly when a partisan operative would have timed it.
If anything, both the Census Bureau and Labor Department need more resources, not fewer, to update and modernize how they collect and analyze data. As Trump correctly pointed out, the Federal Reserve relies on BLS data to make decisions about when to raise or lower interest rates — Trump contends that the BLS conspired to make the jobs numbers initially high so the Fed would not lower rates, a policy that he wants it to pursue. And the Federal Reserve’s decision-making process is only as good as the data it receives, which includes not only BLS jobs numbers but also the Consumer Price Index, also produced by the BLS, and the Personal Consumption Expenditures produced by the Bureau of Economic Analysis.
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Trump has every right to demand that all of these data sets be produced with unbiased professionalism. Decision-makers need reliable data to make decisions. More importantly, voters deserve reliable information to hold elected officials accountable. Firing the head of the BLS will not improve data collection and analysis.
The White House Office of Management and Budget has designated 40 monthly and quarterly reports as key economic indicators that are protected from early release to prevent market manipulation. Each of these faces its own logistical challenges in a rapidly changing economy. Instead of cutting funding for these reports, Trump should bring in the best minds from the private sector and higher education to ensure they are conducted as fairly and as accurately as possible.