Economists Warn Trump's BLS Firing Parallels Authoritarian Leaders

Several prominent economists have warned that U.S. President Donald Trump's decision to fire the head of the Bureau of Labor Statistics (BLS) places him in the company of leaders like Turkish President Recep Tayyip Erdoğan, who are accused of undermining independent institutions. A poll conducted this week by the University of Chicago's Kent Clark Center for Global Markets among U.S. economists revealed no evidence that the BLS's employment data is biased towards Republicans or Democrats. Many participants indicated that Trump's repeated attacks on American economic institutions pose a serious threat to the reliability of official statistics in the country. These warnings surfaced after President Trump fired Erika McEntarfer, the BLS commissioner, last Friday. This followed the release of the U.S. jobs report for July, which showed a sharp slowdown in hiring activity during the summer. Trump claimed that the report, which included significant downward revisions to the May and June hiring numbers, was "completely manipulated" to target him and the Republican Party. José Scheinkman of Princeton University suggested that Trump, by seeking to "seize control of statistical agencies," is "emulating" leaders like Erdoğan. The Turkish president dismissed the head of the National Institute of Statistics in 2022 after a report showed inflation hitting a 19-year high. Erdoğan has also fired central bank governors multiple times. Chad Syverson of the University of Chicago's Booth School of Business similarly defended the BLS's economic reports, stating, "Statistical uncertainty that is ultimately resolved in a way someone doesn't like is not political bias." Caroline Hoxby of Stanford University added, "The BLS statistics are produced in a way that has been consistent for many years." Of the 46 economists surveyed, 38 said they strongly agreed that there is no evidence the employment estimates produced by the BLS are biased in favor of any particular political party. Another five agreed with the statement, while the remaining three did not answer the question. A Labor Department official, the BLS's parent agency, stated that "the BLS commissioner appeared to be allowing problems to arise rather than proactively working with the administration to find solutions to maintain the data's quality and integrity." The official added that the department learned of cuts to inflation data collection through the media and that McEntarfer did not engage with the administration to address declining survey response rates. The BLS had previously stated that the data collection cuts were due to staff shortages following a federal hiring freeze. Although the BLS has consistently suffered from staff shortages, funding gaps, and declining survey responses, former statisticians and economists say manipulating the data is extremely difficult. Anil Kashyap of the University of Chicago's Booth School of Business said, "If you have a little bit of knowledge of how these numbers are constructed, you would know that to successfully manipulate it requires a massive conspiracy." Trump had claimed that the BLS inflated job numbers last year to help Democrats during last year's presidential election. However, the agency revised the numbers down by more than 800,000 in August 2024, a move that was seen as a blow to Democrats at the time. Judith Chevalier of Yale University's School of Management said, "The BLS has produced inflation and employment data that have been unfavorable to both parties." McEntarfer was confirmed in the Senate by a vote of 86-8 in January 2024, with both current Vice President J.D. Vance and current Secretary of State Rubio voting in favor. Economists believe the BLS's data series, from the Consumer Price Index (CPI) inflation readings to the Job Openings and Labor Turnover Survey (JOLTS) labor market data to import price data, are among the best guides to the performance of the U.S. economy. These indicators also include consumer spending data, personal savings rates, and productivity metrics. Some economists now question whether the data will remain a reliable gauge of the world's largest economy. Nancy Stokey of the University of Chicago said: "The U.S. has long enjoyed a well-deserved reputation for its reliable economic statistics compared to other countries that manipulate economic data for political purposes, but Trump's firing of the BLS commissioner will only damage America's reputation." It's important to note that economic data collection and analysis is a complex process requiring technical expertise and independence. Any political interference in this process can undermine data credibility and lead to unsound economic decisions. Furthermore, maintaining public trust in statistical agencies is crucial for informed policymaking and economic stability. When individuals lose faith in the accuracy and impartiality of government data, it can lead to uncertainty and instability in financial markets. Economists emphasize the need for transparency and methodological rigor in data collection. Independent oversight and professional integrity are also essential to ensure the reliability and usefulness of economic indicators. Therefore, it is vital to safeguard the independence and objectivity of statistical agencies like the BLS to ensure the production of credible and reliable data that can inform sound economic policies and promote long-term economic prosperity.