Labor Department Launches Investigation Into BLS Data Collection

(Jamie Kelter Davis/Bloomberg)

The Labor Department announced Wednesday that it is investigating the Bureau of Labor Statistics’ collection and reporting of data.

In a letter dated Wednesday, the Office of Inspector General said it was initiating a review of the challenges that the BLS encounters in collecting and reporting closely watched economic data.

The letter noted that the investigation would center on recent announcements by the BLS that the agency was reducing data collection for the consumer price index and the producer price index.

The review will also look into a large downward revision of the BLS’s estimate of monthly payroll growth.

The Inspector General will be looking into “mitigating strategies” for collecting PPI and CPI data, as well as “collecting and reporting, including revising, monthly employment data.”

Last month, President Donald Trump fired commissioner Erika McEntarfer after the BLS released a weak July jobs report. The July jobs report also subtracted 258,000 job gains from estimates for previous months because the agency received additional responses from employers. Additionally, the BLS reported Tuesday that its preliminary benchmark revisions would slash net payroll gains by 911,000 in the 12 months ending in March.

Trump called the July employment data inaccurate, specifically saying the updated estimates were a “huge mistake.” He noted that McEntarfer, who was appointed by President Joe Biden, “rigged” the jobs numbers to hurt him politically.

The latest employment data released Friday showed no real improvement in hiring. The agency reported companies added only 22,000 jobs to payrolls in August. The BLS also reported that job growth in June was negative, with nonfarm payrolls declining by 13,000.

Trump has nominated E.J. Antoni, currently chief economist of the Heritage Foundation, a conservative think tank, to head the BLS. Senate confirmation could come as soon as October. Until a commissioner is confirmed, Bill Wiatrowski has been serving as acting commissioner.

Concerns over Antoni’s appointment, however, have been raised, including regarding his lack of experience, as well as his reported presence at the Capitol during the January 6, 2021, attack. The White House has said he was a bystander. There have also been reports that Antoni was involved in a Twitter account that posted sexually explicit attacks on Kamala Harris and bigoted content against gays, according to a CNN investigation.

Antoni couldn’t be immediately reached for comment.

The challenges facing U.S. statistical agencies to produce timely, reliable economic data have been a growing concern, though most economists say the recent revisions have nothing to do with politics, contrary to comments made by President Donald Trump. U.S. statistical agencies have grappled with lower survey response rates and budget shortfalls for more than a decade, which has hindered their collection and analysis of economic data.

The challenges facing U.S. statistical agencies in producing timely, reliable economic data have become a growing concern. For more than a decade, U.S. statistical agencies have grappled with lower survey response rates and budget shortfalls, which have hindered their collection and analysis of economic data. Most economists say the recent revisions have nothing to do with politics.

Trump and his allies haven’t acknowledged the lack of resources in their calls for new leadership at the agency. Stephen Miran, the current chair of the Council of Economic Advisors and Trump’s nominee to the Federal Reserve’s Board of Governors, said last week at his nomination hearing that he believes that the BLS data have deteriorated in quality and reliability. He added that he believes the agency “needs an overhaul and fresh pair of eyes.”

“I’m making the statement that BLS leadership did nothing to arrest the deterioration in data quality,” Miran said at the hearing.

When specifically asked if it was appropriate for Trump to call out and fire BLS leadership simply because he didn’t like the results, Miran said that he does not make “personnel decisions, nor do I have a legal training in constitutional employment law, or, for that matter, any type of law.”

Write to Megan Leonhardt at megan.leonhardt@barrons.com