Trump defends BLS Chief shooting in a tense CNBC exchange
Trump fired BLS commissioner Erica Mantelfer, causing a tense exchange with CNBC’s Joe Kernen on “Squawk Box” over the integrity of employment data.
President Donald Trump’s sudden firing of U.S. Labor Statistics Commissioner after a disappointing employment report raised concerns about the future accuracy and completeness of the country’s important employment numbers.
Some economists and former government officials respond to the simple message: worry about relaxation.
These experts cite three reasons why Trump administration officials are unlikely to manipulate statistics for political reasons. Widely equivalent figures are listed in other reports. And Chakanelly has a disability.
“It’s going to be pretty difficult to fix statistics,” said Sarah Estep, an economist at the left-leaning center for American progress, based on politics.
Still, ESTEP and other experts say the reliability of data is being questioned – in itself can have a negative impact on the economy and markets, and attempts to massage numbers are not an area of possibility.
“The concern is that this could mark the beginning of a slippery slope towards the major impact of the White House’s influence on economic statistics. In the worst-case scenario, official releases such as payroll and CPI (inflation) that can be useful for the Trump administration’s agenda could be censored, reengineered or suspended.
A White House spokesman did not immediately return an email message seeking comment. However, on “Meet the Press,” on August 3rd, National Economic Council director Kevin Hassett told moderator Christine Welker that Trump simply wanted to make employment reports more transparent.
“If there are big changes and big revisions, I’m hoping for a big revision of employment data, for example, in September. I want to know why. I want people to explain it,” Hassett said.
What was your July job report?
On August 1, Trump reported 73,000 jobs in July and fired Erica Mantelfer, Commissioner of the Bureau of Labor Statistics, after revising the salary additions at 258,000 positions historically in May and June.
The economist said large companies could explain it by the unusually low response rates of BLS’s initial survey.
But true socially, Trump said he “equipped with the number of jobs today being equipped to make Republicans, and I look bad.”
After firing McEntarfer, he appointed William Wiatrowskias’ interim BLS head and said he would name a permanent replacement within days.
William Beach, McEntarfer’s BLS chief and Trump appointee, said it was “impossible” for BLS commissioners to manipulate employment data. He added that the person will not see the report until the numbers are loaded on Wednesday and ready for distribution before it is released on the first Friday of the month.
Keith Hall, who was appointed BLS commissioner by former President George W. Bush and served from 2008 to 2011, told USA Today that too many careers, nonpartisan civil servants are working to draft reports that distort data. Around 40 Republicans and Democrats look at the final number of jobs just before publication, Beach said earlier.
Is Trump trying to control independent federal agencies?
But economists are worried that Trump can test that estimate. His removal of McEntarfer shows his latest challenge to federal agencies where independence is important for a smooth-functioning economy. For months, Trump threatened Federal Reserve Chairman Jerome Powell to lower interest rates and threatened to fire him, but experts say Powell can’t be eliminated for no reason.
Economists see employment reports as the global gold standard for accurate and unbiased economic data, providing the best broad snapshots of the US economy in a time of year close to reality, helping to guide the behaviour of investors, businesses, governments and consumers.
Trump’s removal of Mentarfer “poses risks to monetary policy implementation, financial stability and economic outlook,” Jpmorgan Chase economist Michael Feroli wrote in a note to his client. He added, “The risk of politicizing the data collection process should not be overlooked.”
Here’s why some experts say they’re not worried about the reliability of their job numbers:
Other federal government duties
If a BLS commissioner or other key employees oversees the number of jobs, “contradictions will be reported at the state level and are federally susceptible (which will soon be visible in other metrics, such as unemployed claims,” Capital Economics said in a research note.
The first unemployment insurance application provides a reliable measure of layoffs. The employment report also represents the net total of all layoffs, employment, termination, retirement and job switching across the economy.
Private Job Report
Even if the administration “put all major statistical institutions under strict control, economists and investors still managed to infer the true state of the economy from private sources,” Capital Economics said. These include ADP Employment Reports and job postings from major job hunting sites.
“Tampering official data is likely to be exposed sooner or later, and will be politically harmful if discovered,” Capital Economics said.
The market is watching – and reacting
If evidence emerged that managers were messing around with employment data, investors probably demanded higher profits to hold assets such as the US Treasury, pushing interest rates up, Capital Economics said. Trump has been enthusiastically advocating for lower rates.
The research firm added, “The administration tends to avoid upsetting the market — especially when it leads to an increase in bond yields and increased debt service costs.”
Trump tends to push envelopes, but not to tear it
Trump has shown a tendency to push boundaries in his efforts to achieve his goals “without a clear intersection,” Capital Economics said. For example, he stopped firing Fed Powell.
“This fits into the broader pattern of administrations that put maximum pressure on them to reach the issue of deportation to federal layoffs without openly ignoring the courts,” writes Capital Economics.
Many people edit job reports
The Jobs report is like a massive puzzle put together by hundreds of employees, and the piece needs to fit. If the final numbers were fuded, then employees who worked on entering those numbers would recognize it and speak out, Hall said.
“All the data, details, and industry statistics all need to be summed,” he said.
Basic job data
BLS is well-known transparent and provides data that is based behind all the job counts, Estep said. For example, the unemployment rate is based on a survey of 60,000 households, and agents will have a personal response, she said.
At the same time, here are some reasons why some experts are still worried:
Private employment data depends on the number of federal governments
ADP and other private companies provide employment data, but Ferroli said that private sector data is usually “based on federal data” because private sector data is not representative nationwide. For example, ADP relies on the federal employment report two months ago to estimate last month’s figures.
Risk of political interference
At a “press conference,” Hassett told Welker. “The president wants his people (in BLS), so looking at the numbers, they’re more transparent and reliable,” he said.
Estep: “I’ll keep an eye on it” for the potential replacement of long-term civil servant BLS and other institutional political appointees.
“Anyway, are they setting up more plans for the politicization of these statistical institutions?” asked Estep.
The data may be accurate, but is it reliable?
Even if data is unlikely to be manipulated, “it can be unreliable,” Estep said, saying it could affect the market, businesses and consumer behavior. “The element of trust, that’s really scary.”
In an opinion article posted on MSNBC.com, David Madland, a senior fellow at the Center for Progress in America, wrote: “Government data analysts will do their best to produce reliable reports.
“Reputation damage is already done — and the decline in trust has real consequences.”
