『Controversy at the BLS』のカバーアート

Controversy at the BLS

Controversy at the BLS

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 We dive into the sudden firing of the Bureau of Labor Statistics Commissioner following large downward revisions to the most recent jobs data. Everything is still pretty new, but we get a chance to talk about the scale of the revisions, the normalcy of such adjustments, and the potential implications of politicizing economic data. It's a first reaction to a surprising move with potentially big economic and institutional stakes.In this episode, we discuss:* The scale and context of recent BLS jobs data revisions* Why revisions are a normal and expected part of labor statistics* Concerns raised by firing a data-focused civil servant over routine changes* The institutional risks of undermining trust in economic data* How policymakers and markets rely on accurate, stable data reporting* And a whole lot more!Catch up on some old episodes:You can also listen to us on Google Podcasts, TuneIn Radio, and Apple Podcasts. If one of these is your go-to podcast service, be sure to rate us and subscribe! Watch this episode on YouTube:Some show notes:Our friend Brian O’Roark made the mistake of texting us about the unexpected firing following the jobs report, which meant he got invited to chat with us. Brian kicked things off with a watermelon vodka cocktail called Brave New Swirl, inspired by the Tequila Mockingbird book. Jadrian opted for a non-alcoholic Electro Lime Circa de Cerveza, and Matt cracked open a Lift Off IPA from Daredevil Brewing Co., a gift from superfan Tim Dye.If you’ve missed the news over the past week, the BLS released its July jobs report on Friday, which included a downward revision of more than 250,000 jobs for May and June. It was one of the largest revisions outside of COVID since 1979. Hours later, President Trump dismissed the BLS Commissioner.We took some time to talk about why revisions happen in the first place. The BLS relies on surveys from over 600,000 workplaces, many of which respond late or not at all. As more data comes in, earlier estimates are adjusted, making revisions common and expected. Our surprise wasn’t based on the revision itself, but the political response. Firing someone over a data adjustment has struck many economists as dangerous, as it undermines the statistical integrity of key economic institutions.There is a lot of institutional expertise at agencies like the BLS. Even though the Commissioner was removed, much of the technical staff remains. This will likely limit the immediate risks to data quality. But the move raises concerns about future interference. Would staff feel pressure to avoid “bad news”? Could upcoming data releases be skewed or politicized?Of course, there are some historical parallels to be drawn, mainly from Eastern Europe and China, where statisticians faced pressure to produce politically favorable numbers. While the U.S. isn’t there, it’s worth noting that credibility and trust are slow to build and easy to lose. The firing also reignited longer-standing debates about how we define and report key economic indicators. Measures like unemployment and inflation rely on intentionally rigid definitions so that economists can make comparisons over time. For instance, inflation calculations don’t just track the price of a product; they adjust for changes in size, ingredients, and quality to make fair comparisons across decades. Even when updates to these definitions are made transparently, they often spark confusion or accusations of manipulation. A recent example came during the pandemic when the Fed revised the definitions of M1 and M2 to reflect modern banking habits. Although nothing new was being “printed,” the change caused spikes in the data that fueled misinterpretation online. Our friend Dr. Abdullah Al Bahrani wrote about it for his newsletter when it was happening:All of this also raises big questions about where policy goes from here. The Fed has been under pressure to cut interest rates, and weak labor market data would support that move. But if Trump is dismissing the jobs numbers as wrong while insisting the economy is booming, then the rationale for rate cuts disappears. Brian noted that Trump seems to want both a roaring economy and low interest rates, an inflationary combination if taken too far. And if last week’s events set a precedent, should the BEA Commissioner be worried if GDP slows after recent tariff moves? Let us know if there’s another angle we should have considered. Are we onto something, or way off base?This week’s pop culture references:Brian shared a scene from National Lampoon’s Christmas Vacation where Clark is shocked to learn that Cousin Eddie hasn’t bought any presents. The conversation turns to Eddie’s long-term unemployment. We learn that it isn’t because jobs are unavailable, but because he’s holding out for a management role. Brian likes to use the clip to illustrate frictional unemployment in action.Jadrian brought up one of his favorite classroom examples: ...
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