President Donald Trump and his administration spent the final month portraying not too long ago dreadful jobs knowledge as a “scam” and an organized vendetta in opposition to his presidency. That effort hit a brick wall Friday after the authorities produced up to date jobs numbers that painted an much more regarding portrait of the US economic system.
Trump final month labeled the disappointing July jobs report as “rigged,” and fired Erika McEntarfer from her position as Bureau of Labor Statistics commissioner. Afterward, high administration officers bent over backward to clarify why the president was justified in his extraordinary motion, which was based mostly on a declare he has but to substantiate: The BLS’ knowledge assortment is awful, administration officers maintained, and revisions to the jobs report are too dramatic month to month to be trusted. A brand new commissioner is required, they mentioned, to oversee reforms.
McEntarfer is out. Yet Friday’s jobs report however confirmed that hiring continued to stall out and the variety of jobs really fell in June for the first time since 2020 – all whereas the revisions the Trump administration so vociferously complained about had been considerably much less dramatic than in prior months.
In different phrases: The jobs knowledge the Trump administration used to sign a scandal was neither historic nor proof of corruption.
Established in 1884, the Bureau of Labor Statistics is an independently operated physique inside the US Department of Labor. The labor secretary, a member of the president’s Cabinet, has oversight of the BLS, however it is run by a Senate-appointed commissioner.
The BLS collects knowledge on a variety of key financial considerations and produces crucial studies on a common foundation. Those embrace knowledge on costs, inflation, productiveness, spending, pay, office accidents, employment and unemployment.
More than 2,000 individuals work for the BLS, together with a variety of economists and survey takers who repeatedly contact companies and employees. The economists analyze the knowledge and produce studies for the public and the authorities.
The BLS collects jobs knowledge in two separate surveys. The first is completed in half by old school door knocking. Survey takers go dwelling to dwelling all through the nation asking individuals for his or her employment standing and their demographic data.
A second survey, referred to as the Current Employment Statistics (CES) survey, is collected from hundreds of companies and authorities businesses utilizing a number of strategies: through phone, web surveys, and – for big firms – by way of an automatic knowledge switch. By legislation, participation in the CES survey is voluntary, however state legal guidelines in New Mexico, Oregon and South Carolina require companies to produce knowledge for the survey. A legislation in Puerto Rico additionally requires the territory’s companies to submit knowledge to the BLS.
CES survey respondents submit month-to-month employment, hours and earnings knowledge for all paid employees to the BLS from their payroll information. The knowledge is collected for the pay interval that features the twelfth of the month.
BLS economists first edit the data to detect processing and reporting errors. If errors are detected, BLS staff contact the enterprise for clarification.
Then, BLS workers put together the knowledge for a month-to-month report by estimating America’s employment, hours labored and earnings. To extrapolate the knowledge for the complete nation, BLS economists add in some educated guesswork, based mostly on seasonal hiring developments. The BLS additionally smooths out the knowledge with calculations referred to as seasonal changes to keep away from enormous spikes and dips in the knowledge every month.
The BLS additionally protects the uncooked knowledge and its estimates by processing them by way of statistical assessments, so people can’t acquire entry to any explicit employer’s knowledge. That consists of the BLS commissioner, who doesn’t see the knowledge till it is accomplished for the report.
Trump’s first-term BLS commissioner, William Beach, last month told NCS that protocols at the company prevented its chief from manipulating the knowledge.
Every month, sometimes on the first Friday, the BLS produces its Employment Situation Summary, recognized colloquially as the month-to-month US jobs report.
The report is generated from the two surveys: The family survey supplies demographic knowledge and the unemployment price. The enterprise survey supplies knowledge on pay, hours labored and the variety of jobs the US economic system added or subtracted.
In addition to that individual month’s jobs data, the report additionally revises up or down the earlier two months’ jobs totals.
The BLS considers its preliminary jobs numbers to be preliminary once they’re first printed as a result of some respondents fail to report their payroll knowledge by the BLS’ deadline. Low survey responses could make the report tougher to estimate. But the BLS continues to accumulate the payroll knowledge as it’s reported, and it revises the knowledge accordingly.
The knowledge can also be revised due to the seasonal changes. If the extra full knowledge comes in effectively above or beneath the preliminary knowledge, revisions may be exacerbated by the BLS’ seasonal changes, which typically want to be recalculated.
The knowledge is revised a number of occasions: in every of the two months following the preliminary report, a preliminary annual revision in August and a ultimate annual revision in February.
In the July report, issued final month, revisions for May and June had been traditionally massive – diminished by a mixed 253,000 jobs – however they weren’t unprecedented.
The August report included revisions that had been significantly smaller: June’s jobs complete was revised down by 27,000, and July’s was bumped larger by 6,000 jobs – a mixed 33,000 jobs.
The BLS tracks each month’s revisions relationship again to 1979 however launched a new probability-based pattern design for revisions in 2003. Between 1979 and 2003, the common month-to-month revision was 61,000 jobs. Since 2003, the common month-to-month revision is barely a barely extra correct 51,000 jobs.
But you don’t want to look thus far again to discover bigger revisions than the ones the BLS not too long ago reported. In 2020 and 2021, jobs numbers had been throughout the map due to the pandemic: Revisions in 4 months throughout these years had been larger than the revisions from final month’s report – together with the largest-ever 679,000-job revision in March 2020, attributed to significantly poor survey responses throughout a nationwide lockdown.
There have been larger revisions outdoors of the pandemic, too, together with a 143,000-job revision in January 2009.
Trump has complained about a preliminary annual revision that was issued in August 2024 that confirmed the US economic system had added 818,000 fewer jobs over the previous 12 months than beforehand reported. Trump in a Truth Social post final month incorrectly referred to as that revision a “record”: A 902,000-job revision in 2009 was larger. And the ultimate 2024 revision, issued in February, confirmed that the 2024 knowledge was overestimated by 589,000 jobs. The BLS mentioned the distinction between the preliminary and ultimate annual revisions was due to data acquired in US tax returns.
Trump accurately noted last month that the BLS revised decrease preliminary jobs totals in August and September 2024 by a mixed 112,000 positions earlier than final 12 months’s presidential election. But that revision was not out of the unusual – a number of revisions had been bigger earlier in the 12 months and in earlier years. And October’s jobs numbers, reported simply days earlier than the election, constituted the worst month for jobs since the pandemic.
Many companies and authorities organizations depend on the BLS knowledge for his or her decision-making about funding, pay and hiring. The Federal Reserve, in explicit, depends on the BLS knowledge to assist information its financial coverage and interest-rate-setting.
Fed Chair Jerome Powell mentioned in July that the complete economic system depends on sturdy knowledge.
“Good data helps not just the Fed, it helps the government, but also helps the private sector,” Powell mentioned at a press convention following the central financial institution’s final coverage assembly. “It’s very hard to accurately capture in real time the output of a $20-plus trillion economy, and the United States has been a leader in that for 100 years, and we really need to continue that, in my view.”
In June, Powell informed Congress he was involved about the “trajectory” of weaker knowledge.
In addition to the Fed and the personal sector, the BLS notes its survey knowledge is utilized by the National Bureau of Economic Research to decide whether or not or not the economic system is in a recession. It’s utilized by the Conference Board to produce financial indexes that assist corporations higher perceive the present enterprise cycle. And it helps the BLS produce a number of different studies about jobs and the economic system all through the 12 months.
What Trump and officers are saying now
So far, the Trump administration has not claimed the August jobs numbers had been rigged. Trump on Friday in his first public feedback after the jobs report blamed Powell for conserving rates of interest excessive. Labor Secretary Lori Chavez-DeRemer echoed that stance.
National Economic Council Director Kevin Hassett conceded that the jobs report was a “disappointment,” blaming the BLS’ inability to track summer hiring. He additionally, with out proof, attributed a few of the hiring hunch to Trump’s immigration coverage, a conclusion that the jobs report does not capture.
Commerce Secretary Howard Lutnick mentioned Friday simply earlier than the jobs report was printed that McEntarfer was rooting against Trump and America’s success, which led to skewed jobs numbers. He provided no proof to again that up.
Trump has since nominated E.J. Antoni to the position of BLS commissioner, however he has not been confirmed but. Lutnick mentioned the BLS received’t give you the chance to repair all of the perceived issues at the company instantly after McEntarfer was fired however mentioned the hundreds of economists and knowledge analysts at the BLS will now be on Trump’s aspect, “just trying to do their best and put out the correct numbers.”
Alternatives to the BLS knowledge have confirmed restricted. Payroll processing firm ADP produces a month-to-month personal payrolls report that fails to seize authorities hiring and is notoriously out of sync with the BLS report. Its inconsistencies have led economists to largely ignore the report.
Other surveys, similar to a layoffs report from outsourcing and placement companies agency Challenger, Gray and Christmas, is typically instructive however far much less sturdy than the BLS report.
The BLS report has its challenges, too. For instance, the family survey that features the month-to-month unemployment price and demographic knowledge is taken into account moderately unstable due to its smaller pattern measurement and declining response charges. But the enterprise and authorities employment survey is broadly thought of by economists to be the gold commonplace.
“BLS is the finest statistical agency in the entire world, its numbers are trusted all over the world,” Beach informed Kasie Hunt on NCS’s “State of the Union” final month.