President Donald Trump fired the commissioner of the Bureau of Labor Statistics, claiming that last week’s jobs report “was rigged” without providing any evidence.
But former Labor Statistics officials say that the commissioner typically doesn’t have a role in preparing the monthly jobs report.
“There’s no way for that to happen,” said William Beach, Trump’s nominee to be BLS commissioner during his first term, in a Sunday interview on CNN.
“The commissioner doesn’t do anything to collect the numbers. The commissioner doesn’t see the numbers until Wednesday before they’re published. By the time the commissioner sees the numbers, they’re all prepared. They’re locked into the computer system,” Beach continued.
So how does the BLS collect data for the jobs report?
The process for preparing the monthly jobs report, formally known as the “Employment Situation Summary,” starts with a survey of American households.
The Current Population Survey goes out to about 60,000 households across the country, including about 2,000 trained employees interviewing people. The sample of households surveyed changes periodically and no household is surveyed more than four months in a row.
“Each month, one-eighth of the sample is interviewed for the first time, one-eighth for the second time, and so on. This rotation scheme has been in use since July 1953 and strengthens the reliability of estimates of month-to-month change as well as estimates of year-to-year change,” the bureau says in its website.
The BLS also conducts a survey of government agencies and businesses, asking them for information about their workforce, hours worked and earnings data from their payroll records. That data is collected by BLS over the phone and digitally. After data from companies and agencies are submitted, BLS analysts review the data. All of the information submitted to the BLS is treated with strict confidentiality.
Federal law authorizes the Bureau of Labor Statistics to collect and process this information.
Asked to provide evidence for Trump’s claims of impropriety, National Economic Council director Kevin Hassett said on NBC’s “Meet the Press” that revisions made to prior months were “the evidence.”
Trump also said the revisions were evidence of someone manipulating the data, “I assume in the hopes of getting ‘Kamala’ elected.”
“What you saw on Friday was the effect of trying to do a better job, getting more information,” Beach said, referring to the revisions.
Erica Groshen, commissioner of the agency from 2013 through 2017, concurred and said revisions are not the sign of any manipulation.
“The important thing is to realize that revisions are not a bug. They’re a feature, right? The BLS tries three different times to get employers to report how many jobs they have and sometimes the employers can’t report it right away. So, the BLS imputes the number from behavior of other people, other companies like them, and history,” Groshen said on CNN on Friday.
“And [BLS] puts out the first monthly number because there’s a lot of good information in it, but it’s not complete. And then a month later it goes back and asks those employers again. They have another chance. And if they made a mistake, they have a chance to correct their mistakes. And it goes back a third time to make sure that they got it right,” she added.
While response rates to the Bureau’s surveys have been declining, researchers recently found that revisions and falling response rates did not reduce the reliability of the jobs and inflation reports.
This style of surveying has been in use by the agency for seven decades. Despite the old-fashioned style of surveying households through the mail and in-person interviews, the first-release estimates of jobs added or lost each month has been getting more and more accurate over time, according to Yale Budget Lab director Ernie Tedeschi.
Once data is gathered from companies, government agencies and businesses, and reviewed by analysts, it is prepared and formatted for the monthly jobs report. That final report includes the number of jobs added that month, revisions for prior months, the unemployment rate and additional stats on jobs added or lost in a variety of industries across the economy.
The Bureau of Labor Statistics uses this general method of data collection for other reports too. Those include monthly inflation figures and productivity reports.
Commissioners at the Bureau of Labor Statistics, while nominated by presidents, often serve across multiple administrations. For example, the commissioner nominated by president George W. Bush also served under President Barack Obama. Commissioner William Beach, nominated by Donald Trump, also served under President Joe Biden. And the fired commissioner Erika McEntarfer, who was nominated by Biden, had continued to serve under Trump.
With questions about data reliability now front of mind, JPMorgan’s chief U.S. economist Michael Feroli said Sunday that there really is no substitute for high quality nonpartisan data from the federal government. “Having a flawed instrument panel can be just as dangerous as having an obediently partisan pilot,” he wrote.
“Moreover, one should not be under the illusion that the proliferation of private sector ‘big data’ indicators over the past decade can substitute for high quality federal data. In almost all cases these indicators are benchmarked to the federal data, as private sector data are very rarely nationally representative.”
