White House officials defend firing of labour official as critics warn of trust erosion

Straits Times

2 days ago

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US President Trump accused BLS Commissioner Erika McEntarfer of faking the jobs numbers, without providing any evidence of data manipulation.
WASHINGTON - Top White House economic advisers on Aug 3 defended President Donald Trump's firing of the head of the Bureau of Labour Statistics, pushing back against criticism that Mr Trump's action could undermine confidence in official US economic data.
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 BLS Commissioner Erika McEntarfer of faking the jobs numbers, without providing any evidence of data manipulation. The BLS 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 '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 the Bluesky social media platform, 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 on dozens of trading partners, sending global stock markets tumbling as Mr Trump presses ahead with plans to reorder the global economy.
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'I think what we need is a fresh set of eyes at the BLS, somebody who can clean this thing up,' Mr Hassett said on 'Fox News Sunday.'
In an interview with CBS' 'Face the Nation,' Mr Greer acknowledged there were always revisions of job numbers, 'but sometimes you see these revisions go in really extreme ways'.
Mr Brian Moynihan, CEO of Bank of America, 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. 'Every year we've revised the numbers. When I was commissioner, we had a 500,000 job revision during President Trump's first term,' he said on CNN's 'State of the Union'.
'And why do we do that? Because firms are created or firms go out of business, and we don't really know that during the course of the year, until we reconcile against a real full count of all the businesses.'
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 on ABC's 'This Week'.
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 over the last several years since the Covid 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.
That means each month's initial estimate of employment for the immediately preceding month also contains revisions to the two months before that as well, because by the third month the response rate has typically climbed to around 92 per cent.
The revisions in Aug 1's report were, however, large by historic 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, which was the largest ever and was reported in June 2020 for the payrolls report for May 2020.
Aside from that revision, Aug 1's revision for May was the largest for a change from the second estimate to the third estimate since a 127,000 job downward revision in March 1983, according to BLS data. REUTERS