Trump’s degraded data is worse than book-cooking

Donald Trump's stance on Covid-19 turned out to be a prelude for his second term. The US president, who in 2020 argued that "If we stopped testing right now, we'd have very few cases" of the coronavirus, is applying this logic to environmental, health, and - with the firing of the top Labor Department statistician — economic data. With presumably committed professional staff still in place and alternative data sources available, the main risk isn't fake, rosy data — it's that firms, investors and policymakers will see pillars of the market crumble.

The Bureau of Labor Statistics each month estimates jobs created in the prior period and updates its two previous estimates. Glum numbers on Friday prompted Trump to shoot the messenger. Following a report that 73,000 jobs were added in July, combined with a reduction of 258,000 for May and June's numbers, the president fired BLS Commissioner Erika McEntarfer.

His argument that the employment survey is biased, and that revisions were tilted in favor of former President Joe Biden, does not survive under scrutiny. The agency revised down job growth by 818,000 during 2024's presidential election—hardly positive news for an incumbent administration. While this revision was large, volatility is unsurprising amid a trade war and immigration restrictionism.

This president is already dismantling other research bodies, whether at the Environmental Protection Agency, or the carbon-tracking Mauna Loa observatory, or advisory boards at the Food and Drug Administration and Centers for Disease Control. Companies and whole sectors, like insurance and pharmaceuticals, rely on government data for myriad uses: carbon markets, flood insurance calculations, automaker emissions compliance, solar energy output projections, disaster planning and resilience, creditworthiness for infrastructure projects, and more. There is no explicit promise to outright cook the books. Nonetheless, any threat to the integrity of this data degrades a vast infrastructure supporting modern markets, built up over more than a century.

A ham-fisted push to skew the numbers would probably be self-destructive, drawing skepticism from outside professionals. Signals like resignations of remaining career staff will be clear. And, simply put, people know whether they have a job or not.

Studies from countries that have manipulated official data, like Argentina, show that consumers don't trust fake figures, creating black markets to exploit any spread between fantasy and reality. Even without active sabotage, outdated practices may have slid in this direction by accident: officials warned that the BLS needs a refresh, including by jettisoning ever-less-reliable phone surveys and favoring real-time digital sources like job postings or credit card data. Those worries now get an extra political dimension, no matter what happens.

US President Donald Trump fired the head of the Bureau of Labor Statistics on August 1, following an employment report showing weak job growth and downward revisions to prior data.

Trade Representative Jamieson Greer told CBS on August 3 that Trump had "real concerns" about the BLS data, while Kevin Hassett, director of the National Economic Council, said the president "is right to call for new leadership."