Why it matters that Trump fired data chief

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Hello, and thanks for downloading the More Orless Podcast.

We're the program that disentangles numerical claims in the news, life, and in the social media posts of world leaders.

And I'm Lizzie McNeil.

On Friday, the 1st of August, President Trump did something that sent shockwaves around the United States statistical community.

You're fired.

Yes, he channeled his ex-The Apprentice Days and fired the head of the U.S.

Bureau of Labour Statistics, Erica McIntartha.

The Bureau of Labour Statistics, or BLS, is a federal agency that produces information about the U.S.

labor market and consumer prices.

Now, a president hiring and firing people in and of itself is not shocking.

They do have the right to do that.

The problem lies in why McIntyre was fired and what the president has said about the firing.

The numbers were phony.

The numbers were ridiculous.

So,

what is going on and why does any of it matter?

Let's take you back to Friday, the 1st of August.

Brand new jobs numbers just out.

You can see them behind me.

In July, the U.S.

added just 73,000 new jobs below expectations, the unemployment rate at 4.2%.

But the big news, really big news, major revisions for May and June, major downward revisions.

Those months much, much worse than thought.

Well, on Friday, the Bureau of Labor Statistics in the United States released information about the labor market for July and for May and for June.

And the number of net new jobs added in those months looked relatively weak.

I'm Michael Stray and I'm an economist with the American Enterprise Institute and a professor at GeorgeCon.

The May and June figures were revised downward by about a quarter million.

If you looked at the data for May, June, and July together, the underlying place of monthly job growth looks to be around 35,000 jobs a month, which is, you know, on the low side.

I think President Trump was concerned that tepid job growth was a political liability that would be used by people who are concerned about his trade policy and his immigration policy to indicate that those policies aren't working.

And so the president shot the messenger.

Not literally, thank goodness.

This isn't Soviet Russia.

By the way, they did shoot one of their leading statisticians when they didn't like the numbers.

Time for a bit of context.

The number of jobs in May was revised down by 125,000 and the number from June fell by 133,000.

Now the total number of employees in the US is nearly 160 million so as a percentage of the total the margin of error for each of the two months was less than 0.2 percent.

Not too wild you might think.

However, since the firing, Trump has defended himself, throwing doubt on the data.

Why

He's also taken to his social media platform, Truth Social, with long posts talking about rigged data, phony numbers, and biased statisticians purposefully falsifying the data for political purposes.

And the White House has not produced a shred of evidence supporting that assertion.

And there is every reason to believe that that that assertion is false.

The thing is, as many, many people have pointed out, data revisions are completely normal.

Completely.

And the job market figures from the BLS are revised downwards or upwards every month.

Now, this is largely because the stat is based on surveys, and businesses often return their surveys late.

You get better data if you wait for those surveys to come in, but other government agencies need something to work with in the meanwhile.

If we wanted to really nail down the number of jobs added in the month of May, that would require waiting until August.

Well, if the BLS waits until August to tell you what's happening in May, then that makes it very hard for the Federal Reserve, our central bank, to make decisions about interest rates.

That makes it very hard for business leaders to make decisions about their businesses.

That makes it very hard for investors to make decisions about their activity in financial markets.

And so in order to produce timely data, the Bureau says, okay, here's our estimate for what happened last month.

And then that estimate gets revised as more businesses turn in the survey.

And so this is completely standard.

The pattern of revisions in the first Trump administration looks the same as the pattern of revisions in the second Trump administration and looks the same as the pattern of revisions in the Biden administration.

That said, this revision was big in the scheme of things.

If you exclude the COVID period, the combined revision total for the two months is the highest seen since they started recording this data in 1979.

But monthly revisions of more than 100,000 are not unheard of, and they tend to come up during times when uncertainty is high and things are moving fast.

So those first results do show the survey isn't working perfectly, and and that's exactly why they have this revision.

Still, the president didn't like it.

It's a scam, in my opinion.

Now, we're used to the president playing fast and loose with numbers and statistics.

We're gonna get him down

1,000%,

600%,

500%.

Exactly.

The media's used to taking numbers put out by the administration with a fistful of salt.

1,500%.

But when you start conspiracy theories stating that you cannot trust the data U.S.

economic policy is based on, that's going to cause problems.

By calling into question the integrity of the data, President Trump is risking real damage to the U.S.

economy.

If people start to believe that they can't trust the data, then that just builds in a lot of uncertainty.

And the way investors would react to that uncertainty is by concluding that any investment was a little riskier than it otherwise would be.

That would increase interest rates.

That would reduce investment in American companies.

The way business leaders would respond to that uncertainty would be to, you know, pull back on projects or to not start new projects, not to expand until they could be more sure about the underlying economic facts on the ground.

And the effect on policymakers like our central bank, the Federal Reserve, could lead them to make an extremely costly policy mistake.

And so there are very real and tangible and practical reasons why a widespread belief in the integrity of the data are a foundation of prosperity for the U.S.

economy.

The BLS data is not perfect.

Revisions happen, but it was not rigged.

There is no conspiracy here.

And you just need to look at the bigger picture of the U.S.

economy to see the results weren't that surprising after all.

One of the reasons why we can be confident that labor market data weren't rigged is that the data is consistent with the data on economic output that come from a different agency.

And the data on economic output show that the economy in the first half of the year has been growing slower than its underlying potential.

This issue seems to have actually brought all the think tanks and all the economists who might normally disagree about things.

It seems to have actually united you all and you all seem to be saying exactly the same thing.

That's quite nice to see.

Does that normally happen?

Um

you know, no, it doesn't normally happen.

Uh

there's not room for disagreement about the dangers of a president firing statisticians when he doesn't like the statistics.

We have ample evidence from history of presidents or leaders of governments messing around with statisticians and statistics, and it doesn't work well.

Thanks to Michael Strain, and that's all we have time for this week.

If you see any suspicious numbers around, please let us know at more or less at bbc.co.uk.

Until next week, goodbye.

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