White House officials defend firing of labour official as critics warn of trust erosion
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President Donald Trump again criticised Bureau of Labour Statistics commissioner Erika McEntarfer on Aug 3, without providing evidence of wrongdoing.
PHOTO: AFP
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WASHINGTON – White House economic advisers on Aug 3 defended President Donald Trump’s firing of the head of the Bureau of Labour Statistics (BLS), pushing back against criticism that Mr Trump’s action could undermine confidence in official US economic data.
Later on Aug 3, Mr Trump again criticised BLS commissioner Erika McEntarfer, without providing evidence of wrongdoing, and said he would name a new BLS commissioner in the next three or four days.
US Trade Representative Jamieson Greer told CBS that Mr Trump had “real concerns” about the data, while Mr Kevin Hassett, director of the National Economic Council, said the President “is right to call for new leadership”.
Mr Hassett said on Fox News the main concern was Aug 1’s BLS report of net downward revisions showing 258,000 fewer jobs had been created in May and June than previously reported.
Mr Trump accused Ms McEntarfer
The bureau compiles the closely watched employment report as well as consumer and producer price data.
The BLS gave no reason for the revised data, but noted that “monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors”.
Ms McEntarfer responded to her abrupt dismissal on Aug 1 in a post on social media platform Bluesky, saying it was “the honour of her life” to serve as BLS commissioner and praising the civil servants who work there.
Ms McEntarfer’s firing added to growing concerns about the quality of US economic data published by the federal government and came on the heels of a raft of new US tariffs
Investors are also watching the impact of the surprise resignation of Federal Reserve governor Adriana Kugler, which has opened up a spot on the central bank’s powerful board and could shake up what was already a fractious succession process for Fed leadership amid difficult relations with Mr Trump.
Mr Trump said on Aug 3 he would announce a candidate to fill the open Fed position within the next couple of days.
In an interview with CBS, Mr Greer acknowledged that there were always revisions of job numbers, “but sometimes, you see these revisions go in really extreme ways”.
Bank of America chief executive Brian Moynihan said large revisions of economic data could undermine public confidence and that government officials should develop ways of improving data quality.
“They can get this data, I think, other ways and I think that’s where the focus ought to be: How do we get the data to be more resilient and more predictable and more understandable?” he said on CBS. “Because what bounces around is restatements... that creates doubt about it.”
‘It undermines credibility’
Critics, including former leaders of the BLS, slammed Mr Trump’s move and called on Congress to investigate Ms McEntarfer’s removal, saying it would shake trust in a respected statistical agency.
“It undermines credibility,” said Mr William Beach, a former BLS commissioner and co-chair of the group Friends of the BLS.
“There is no way for a commissioner to rig the jobs numbers,” he said in a CNN interview.
“Every year, we’ve revised the numbers. When I was commissioner, we had a 500,000 job revision during President Trump’s first term.”
Former Treasury secretary Larry Summers, who worked in both the Clinton and Obama administrations, also criticised Ms McEntarfer’s firing.
“This is a preposterous charge. These numbers are put together by teams of literally hundreds of people following detailed procedures that are in manuals,” Mr Summers said in an interview on ABC.
Large revision
The BLS surveys 121,000 employers – businesses and government agencies – each month, seeking their total payroll employment during the week in which the 12th day of the month falls.
The response rate has fallen sharply since the Covid-19 pandemic, from 80.3 per cent in October 2020 to about 67.1 per cent in July.
Knowing that, BLS allows late-arriving employer submissions and revisions to earlier submissions to be taken into account over the next two months.
This means that each month’s initial estimate of employment for the immediately preceding month also contains revisions to the two months before that.
The revisions in the Aug 1 report were large by historical standards.
The downward revision of 125,000 jobs for May was the largest between a second estimate and third estimate since a 492,000 reduction for March 2020.
That was the largest ever and was reported in June 2020 for the payrolls report for May 2020. REUTERS
