Administration justifies dismissal of labor department leader as critics voice concerns over deteriorating credibility
The recent dismissal of Erika McEntarfer as Commissioner of the Bureau of Labor Statistics (BLS) by President Donald Trump has sparked controversy, with concerns about the politicization of economic data and the accuracy of the jobs reports.
Trump plans to announce a candidate to fill the open Federal Reserve position within the next couple of days, adding to the uncertainty surrounding the economic data. The President has criticized McEntarfer, a career labor economist with over 20 years of federal government experience, without providing evidence of wrongdoing or data manipulation. He accused her of manipulating the jobs data for political purposes, following the release of a surprisingly dismal July jobs report.
The report showed hiring slowing significantly, with only 73,000 jobs added instead of the expected 100,000, and past months' numbers were revised downward. The revisions were large by historic standards, with a downward revision of 125,000 jobs for May being the largest between a second estimate and third estimate since a 492,000 reduction for March 2020.
The BLS gave no reason for the revised data, stating that monthly revisions result from additional reports received and recalculation of seasonal factors. The BLS allows late-arriving employer submissions and revisions to earlier submissions to be taken into account over the next two months.
The firing of McEntarfer, a Biden appointee confirmed by a strong bipartisan vote, was controversial because of her nonpolitical background, the bipartisan nature of her confirmation, and the implication that economic data was being politicized. White House economic advisers defended Trump's action, saying it was right to call for new leadership at BLS.
Critics, including former leaders of the BLS, called for an investigation into McEntarfer's removal, stating it could undermine trust in the agency. McEntarfer responded to her dismissal on the Bluesky social media platform, praising the civil servants who work at BLS and calling her time as commissioner the honor of her life.
Meanwhile, U.S. Trade Representative Jamieson Greer and Kevin Hassett, director of the National Economic Council, expressed concerns about the revised data in the May and June jobs reports. Brian Moynihan, CEO of Bank of America, also expressed concerns, suggesting improvements in data quality.
William Beach, a former BLS commissioner, stated that large revisions in employment data have occurred regularly, including during President Trump's first term. The surprise resignation of Federal Reserve governor Adriana Kugler has opened a spot on the central bank's powerful board and could shake up the succession process for Fed leadership amid difficult relations with Trump.
The BLS surveys 121,000 employers each month, with the response rate falling sharply since the COVID pandemic. The controversy surrounding the firing of McEntarfer and the revised jobs data continues to unfold, with calls for transparency and non-political management of economic data.
- The global economy may experience further uncertainty as the ongoing controversy surrounding the politicization of economic data, such as the jobs reports, could potentially impact trading and business decisions.
- Policy-and-legislation and general news outlets are closely following the events surrounding the recent dismissal of Erika McEntarfer, with concerns about the implications for the accuracy of economic data and the politicization of Federal positions related to business and employment.
- Politics has entered the sphere of the Bureau of Labor Statistics, with heated debates arising over the firing of Commissioner Erika McEntarfer and the revised jobs data, which could affect the trust placed by the general public, businesses, and policy-makers in the accuracy of economic reports related to trading and employment.
