Donald Trump dismissed the head of the Bureau of Labor Statistics (BLS), saying that she had been working in a partisan manner, against him with regard to the information released in the monthly employment situation report, particularly the total number of jobs created.
The BLS asks employers to report on the exact number of employees they had during the pay period that includes the 12th of the month. They then produce a report which is released in the morning on the first Friday of the following month. The report is actually produced a few days earlier, and shared with senior government officials. During the Obama administration, some officials would not even have any meetings during those few days, being afraid of accidentally disclosing market-moving inside information. The report is shared with journalists a half hour before the public release, but they are confined to a secure facility from which they cannot leave for that half-hour.
Generally about sixty-some percent of the employers surveyed get their information in on time to make the report. Having the majority of the data, the math and statistics guys at the Department of Labor are able to do a pretty good job of extrapolating that to the whole country. Over the next month or so, they get most of the rest of the responses, and so they publish two revisions to their report, taking into account the data that did not arrive on time.
So the initial report is pretty timely — reflecting the situation around three weeks before the report is published, and the subsequent revisions improve the accuracy. This report is one of the main things used by investors, by the Fed, by managers making decisions, by lawmakers, etc.
The most recent report, the July report, which was released on August 1st, had particularly large revisions to previous months (May and June). Reasons for that could be:
- When things are pretty much the same month-to-month, it is easier to extrapolate with partial data. Conversely, when things are turning (meaning going from positive job growth, to around zero job growth), that is harder to get right.
- Many people involved in producing the report were laid off by DOGE.
- There are always just idiosyncratic, seemingly random things happening.
The new head of the BLS could have some challenges in doing his job:
- Since he was hired specifically because the report issued in early August did not reflect President Trump’s view of the economy, he might decide to simply release a report which reflects President Trump’s view of the economy. I suppose that would be fairly easy — he could get rid of the hundreds of workers, and just interview President Trump once per month.
- He could decide to wait until all of the data is in, and start a new system where the report is issued with a lag of three months or so.
- He could do nothing differently from the previous people.
But regardless of what he does, people will probably have a lot less confidence in the reporting. One possibility is decision-makers depending on other data sources. Moody’s announced that they are staffing up to do their own reporting. ADP (the payroll company) also publishes a report based on their clients.