BLS Director Firing: A New Era of Skepticism?

President Trump's dismissal of the Bureau of Labor Statistics (BLS) director last Friday wasn't entirely surprising, following repeated criticisms of economic data by him and his associates. However, it marks a notable escalation, both in the suddenness of the firing and Trump's repeated, unsubstantiated claims that the numbers were being "manipulated." It's part of a broader effort in Trump's second term, aimed at shaping how the government's vast and influential data streams are presented to markets and the public. This has long been a mix of ideology and political expediency. It's likely to inform the selection of Erika McEntarfer's successor (who Trump said would be announced this week) and influence how the BLS and other government agencies operate going forward.

Past Attempts to Highlight Positive Aspects

In the past, these moves by Trump allies typically involved trying to highlight less prominent statistics to make the situation look rosier, arguing they were offering a more accurate picture of the economy from a Republican perspective. But they were careful not to directly challenge the underlying raw data. Trump has seemingly mixed all of that up. In repeated statements, he claimed his reason for firing McEntarfer was that the numbers she oversaw were a "scam." At the same time, he offered vague allusions to the reforms he wanted to see, failing to reassure markets and observers.

Attempts to Distract and Focus on Stock Market Gains

Trump attempted to deflect attention by pointing to strong stock market performance, but this didn't diminish concerns about the integrity of economic data. It's worth noting that Trump has been dismissive of economic data he disliked for years. Back in 2017, then-press secretary Sean Spicer even claimed that good jobs data were "fake in the past, but very real now."

Concerns About the Credibility of Government Data

However, the firing of those responsible for the data represents a dangerous escalation, leading economic observers to express concerns about the credibility of government data. Some believe that this undermines "American exceptionalism" and damages confidence in information released by the US government.

Focusing on Native-Born Employment and Private Sector GDP

Employment and gross domestic product (GDP) have long been areas of focus for Republicans. On the employment front, the Trump team has focused on BLS data that focuses on employment among native-born citizens, rather than aggregate data that includes foreign-born workers. Regarding GDP, the Commerce Secretary in the Trump administration called for a more accurate measure that excludes government spending. A figure including only private sector output, known as Private Industries Value Added (VAPI), has already been published.

Alternative Interpretations of Economic Data

It appears that the Trump administration's efforts are focused on providing alternative interpretations of economic data rather than changing the original data. This is reflected in the focus on certain figures, such as annual GDP growth, while ignoring other figures that point to slowing growth.

Conclusion

The firing of the BLS director and the efforts to shape how economic data is presented raise serious questions about the integrity of government data. These steps may undermine confidence in official economic information and damage the reputation of the United States as a country committed to transparency and objectivity.