It didn’t generate a lot of attention, but Federal Reserve Chairman Jerome Powell was asked at a press conference last month about “cutbacks” in federal economic statistics collection, and his response struck me as interesting.
“Having really good data … doesn’t just help the Fed; it helps the government; it helps Congress; it helps the executive branch,” Powell explained. “More importantly, really, it helps businesses. They need to know what’s going on in the economy. The United States has been a leader for many, many years in this whole project of measuring and understanding what’s happening in our very large and dynamic economy — and I hate to see us cutting back on that, because it is a real benefit to the general public.”
These unscripted comments came to mind late last week when the new monthly job numbers came out — over the first six months of 2025, U.S. job growth has slowed to a 15-year low — and I heard from some readers who asked variations on the same question: Can we trust economic data from the Trump administration? In an era in which traditionally apolitical agencies have become overtly partisan, aren’t there reasons to be skeptical about the accuracy of federal statistics, which could be manipulated to advance the White House’s political agenda?
Broadly speaking, there are two angles to this worth keeping in mind.
The first relates to concerns about corruption and political mischief. Perhaps Donald Trump, the argument goes, might use his influence to tell the Labor Department to manipulate the data and deceive the public. To date, there have been instances in which the release of embarrassing government statistics was delayed, but there’s been no evidence of statistics being altered to fit a political narrative (though if you’re a government official who’s received such pressure, I sincerely hope you’ll reach out to us and take advantage of one of the many secure ways to communicate with the show).
The second, however, relates to the process through which data is collected. The New York Times reported:
… Mr. Trump’s freeze on federal hiring, combined with the buyouts he offered early in his term, has led to increased staff attrition at the statistical agencies. Staffing shortages appear to have been a factor in the Bureau of Labor Statistics’ recent cuts, according to information the agency provided by email to private-sector economists. … Economists consistently say they still believe federal economic statistics. But they worry the numbers will gradually become more volatile and prone to larger revisions. That is bad news for policymakers, investors and anyone else who depends on accurate, timely data to make decisions.
A related report in The Washington Post added, “Any erosion in the integrity of government data could complicate policymakers’ view of the economy, which is undergoing major policy changes from across-the-board tariff increases to strains in the labor market due to a loss of immigrants.”
In other words, even if we put aside concerns about possible future corruption, the more pressing issue is whether the relevant federal agencies are positioned to produce accurate data — not because of political shenanigans, but because the offices simply aren’t equipped to do the job, despite their best efforts.
My focus has been on jobs, but this goes well beyond the unemployment rate. Politico reported last month:
The Labor Department has scaled back data-collection efforts that feed into its statistical bureau’s monthly inflation estimate, a step that economists and agency alums say will weaken the quality of economic reports that are critical to businesses and policymakers. The move follows a similar decision to eliminate hundreds of gauges that track wholesale prices charged by toymakers, tool manufacturers and other companies.
This is likely to get worse before it gets better. Watch this space.
