A note about Trump firing the BLS commissioner 🤦♂️
When it comes to economic data, it's very difficult to hide the truth 🧮
Following Friday’s disappointing July jobs report,1 President Trump took to social media to announce that he was firing the commissioner of the Bureau of Labor Statistics, the agency responsible for conducting the surveys and compiling the data that’s produced in the report.
From NBC News:
Taking to Truth Social, he attacked Erika McEntarfer, the commissioner of the BLS. He claimed that the country's jobs reports "are being produced by Biden appointee" and ordered his administration to terminate her.
"We need accurate Jobs Numbers," Trump wrote. "She will be replaced with someone much more competent and qualified. Important numbers like this must be fair and accurate, they can’t be manipulated for political purposes."
An administration official told NBC News shortly after the post that McEntarfer had indeed been fired.
Gosh. There’s a lot to be said about the accusations of a conspiracy and the possibility of corrupted numbers in future reports.
For our purposes, I’ll skip to my thoughts on the implications of poor data quality, past and future.
First, remember TKer’s rule No. 1 of analyzing the economy: Don’t count on the signal of a single metric. One month’s figures or a time series using one metric should always be considered in the context of other available data.
For example, the government’s one-month tally of jobs should be confirmed by labor data from private surveys, like those from ADP; sentiment surveys, like those conducted by the Conference Board and the Institute of Supply Management; and business anecdotes, like those coming from quarterly earnings reports.
They should also be considered alongside related metrics like personal consumption expenditures, debt delinquencies, gasoline usage, and the earnings performance of consumer-oriented companies.
Also, while most economic data are deduced from surveys, and thus subject to errors and revisions, earnings announcements don’t work this way.
Every quarter, publicly traded companies report their earnings along with comprehensive financial statements. These quarterly statements cover all of their executed financial transactions, and the annual numbers filed with the 10-K are audited* by third-party accountants. Outside of very rare occasions (e.g., accounting fraud, major failure of internal processes), these numbers are accurate and do not get revised.
This is particularly good news for investors, who rely heavily on the information from the companies they’re invested in.
It's very difficult to hide the truth 🧮
I have no reason to question the integrity of McEntarfer and the work of her colleagues at the BLS. And we can’t rule out the possibility that her replacement just continues to run the agency as it has been.
But if Trump intends to somehow affect the collection and reporting of data in his favor, then he’s got a difficult task ahead of him. Because if the BLS’s figures start to conflict with all of the other data out there, people will stop paying attention to the reports the agency produces.
At that point, his only other alternative would be to replace everyone involved in the production of economic data and replace them with cronies. This seems unlikely for now.
*EDITOR’S NOTE: An earlier version of this story said quarterly reports were audited. This post has been corrected to say that it’s the annual reports that are audited.
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Related from TKer:
Economic data quality deteriorates — 2 thoughts for investors 🧮
The simplest explanation isn't always the correct or complete one 😵💫
I wrote about deteriorating data quality in the June 8, TKer. You can see the whole post below.
Economic data quality deteriorates — 2 thoughts for investors 🧮
June 8, 2025
Policymakers, politicians, business leaders, and investors all use economic data. So, most people agree that any data being cited should be high quality.
But everyone relies on data differently depending on their goals and interests, which means the implications of data quality varies depending on who’s using it.
Today, I’m going to provide some updates on deteriorating data quality and share some thoughts from the stock market investor’s perspective.
‘… errors … miscoded … misapplied …‘ 🙈
We got some unsettling news about data quality last week.
From the Bureau of Labor Statistics (BLS) on Tuesday:
Due to minor errors to weights associated with the introduction of a redesigned Current Population Survey (CPS) sample, some April 2025 estimates will be corrected on June 6, 2025. Major labor force measures, such as the unemployment rate, labor force participation rate, and employment–population ratio were unaffected. While corrections will be made to many estimates, the impact is negligible.
In April 2025, the CPS began to phase in a redesigned sample that is based on information from the 2020 Census. During the introduction of this new sample in April, a derived geographic variable used in the weighting process was miscoded, treating micropolitan areas like metropolitan areas, which led to misapplied noninterview weights for some cases.
That doesn’t instill confidence.
It didn’t end there.
Here’s the The Wall Street Journal on a BLS notice published on Wednesday:
The Bureau of Labor Statistics, the office that publishes the inflation rate, told outside economists this week that a hiring freeze at the agency was forcing the survey to cut back on the number of businesses where it checks prices. In last month’s inflation report, which examined prices in April, government statisticians had to use a less precise method for guessing price changes more extensively than they did in the past.
Economists say the staffing shortage raises questions about the quality of recent and coming inflation reports. There is no sign of an intentional effort to publish false or misleading statistics. But any problems with the data could have major implications for the economy.
None of that’s not great.
“These errors have consequences,” UBS’s Paul Donovan wrote on Friday. “Less understanding of U.S. inflation increases the chances of the Federal Reserve making a policy error (especially with the mantra of ‘data dependency’).”
The news only adds to ongoing concerns about the quality of government data, which relies on extensive surveys and analysis of those surveys.
One of the more discussed concerns in recent years has been the falling response rates to these surveys. The BLS publishes those response rates, and they’ve mostly been going down and to the right.
It takes a lot of resources to conduct these surveys. But the cost is justified by the value it brings to those making decisions about economic policy, monetary policy, and business.
It’s not totally clear how much these developments are affecting the accuracy of the data. But it certainly has affected the robustness of the data and the confidence of those using it.
Two thoughts for stock market investors 🤔
First, remember TKer’s rule No. 1 of analyzing the economy: Don’t count on the signal of a single metric.
Even when the response rates for these BLS surveys were higher, the results were still susceptible to revisions — and sometimes those revisions were significant.
And even when the data is accurate, it’s possible that the bulk of other data tells a conflicting story that may actually be the correct one.
As always, I’d also caution against reading to much into one month’s worth of data. Data can zig zag over short periods. The true picture always becomes more clear when you zoom out and examine trends, not single data points.
“For investors, it is important to remember that broad trends matter, and data precision is increasingly an illusion,” Donovan said.
This is why when analyzing the economy, it’s important to consider the confluence of data holistically and over time. (Kind of like how we do in TKer’s weekly review of the macro crosscurrents.) It’s extremely unlikely that all of the available data will be simultaneously wrong in the same direction over an extended period of time.
Second, the good news is that reported earnings from publicly traded companies are pretty much always accurate.
Recall TKer Stock Market Truth No. 5: “News about the economy or policy moves markets to the degree they are expected to impact earnings. Earnings (a.k.a. profits) are why you invest in companies.“
What investors really care about are earnings because they’re the most important driver of stock prices. And economic data has mattered because it has helped us calibrate our expectations for those earnings.
Every quarter, publicly traded companies report their earnings along with comprehensive financial statements. This information is not deduced from a sample like what we get in economic surveys. These quarterly statements cover all of the financial transactions that are executed, and the annual numbers filed with the 10-K are audited* by third-party accountants. Outside of very rare occasions (e.g., accounting fraud, major failure of internal processes), these numbers are accurate and do not get revised.
So regardless of the accuracy of the economic data, what matters to investors is if companies are delivering on earnings.
The quarterly reset 🧮
To that second point, I like to think of quarterly earnings season as a time to reset and recalibrate my views as an investor in the stock market.
And it’s not just because the reported financial figures are complete and accurate.
We also learn how successfully companies have been able to adapt and execute in what may arguably be a difficult business environment, as defined by the economic data.
This is not to suggest we should be dismissive of economic data.
Rather we should just be mindful of what “hat” we’re wearing as we consider data.
When we’re wearing our stock market hat, economic data matters to the degree it’s expected impact to earnings.
Deteriorating economic data quality is not good 🛑
To be clear, deteriorating economic data quality is a negative development for investors.
While investors have the benefit of getting audited* financial figures every year, the companies they invest in are affected by decisions made by policymakers.
If policymakers are acting on bad data, their decisions may create inefficiencies in the economy and hinder business activity.
Everyone should be in favor of preserving and improving the quality of economic data, especially when that data is informing policy decisions.
*EDITOR’S NOTE: An earlier version of this story said quarterly reports were audited. This post has been corrected to say that it’s the annual reports that are audited.
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Related from TKer:
I’ll have stats and charts from the July jobs report in this Sunday’s newsletter.
Hey Sam, just a note on "These quarterly statements cover all of their executed financial transactions, and the numbers are audited by third-party accountants."
Quarterly reports are not audited, only the annual 10-K filings are audited. Quarterly filings are reviewed, and it's reasonable to believe they are accurate, but that is a decreased level of scrutiny compared to an audit, and the engaged CPA firm does not express an opinion on the financial statements for quarterly reviews.