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Doubts Loom Over Reliability of US Economic Data Amid Staffing Woes
8 Aug
Summary
- Falling response rates, rising costs, and budget cuts threaten sustainability of official US statistics
- Trump administration seeks to replace head of Bureau of Labor Statistics, raising concerns over political interference
- Credible data crucial for US financial system, with ripple effects on interest rates and inflation-linked bonds
As of August 8th, 2025, there is growing unease among investors and economists about the erosion of confidence in US economic data. The Bureau of Labor Statistics (BLS), the agency responsible for producing crucial statistics like the monthly jobs report, has been facing significant challenges in recent years.
According to the article, the BLS has been struggling with falling response rates to its surveys, rising costs, and real-terms budget cuts. The agency's own commissioner, Erica McEntarfer, warned in a speech back in January 2025 that the "current situation is likely not sustainable" and that "official statistics are in jeopardy."
This crisis of confidence has been exacerbated by the Trump administration's decision to replace McEntarfer, which many see as a move to seize control of the statistical agency. Experts warn that any changes made by a new BLS commissioner could be interpreted as attempts to "bias inflation surveys to the downside," potentially driving up borrowing costs and creating ripple effects throughout the financial system.
The reliability of US economic data is crucial, as it underpins the Federal Reserve's monetary policy decisions and the $2.1 trillion market for Treasury Inflation Protected Securities (TIPS). Investors are now questioning whether they should continue to invest in the US, with one strategist noting that "a lot of investors are just saying: 'if we can't trust Fed independence and the Fed's ability to bring inflation under control, and if we can't trust the underlying economic data that drives a lot of those decisions, you know, should we be investing here as much as we are?'"
