Drama over jobs numbers

At 8 a.m. on the first Friday of every month, staffers in the White House, the Federal Reserve, economic councils, think tanks, and universities eagerly await an update to the Bureau of Labor Statistics website. When it finally refreshes, the results inform economic policy and research on the industrial health of the nation. The report on last week’s “Jobs Friday” shocked its readers.

Analysts expected a robust new jobs number, averaging around 175,000 for the month of July. Instead, the bureau found that the United States added a meager 73,000 jobs. It also revised the May and June reports, finding that there were 258,000 fewer jobs created than initially reported in those filings.

Later that day, President Donald Trump fired the agency head, Erika McEntarfer. He accused her of rigging the report to reflect poorly on him. Then he found out that former President Joe Biden had appointed McEntarfer.

“No one can be that wrong? We need accurate Jobs Numbers,” Trump wrote in a post on Truth Social. “[McEntarfer] will be replaced with someone much more competent and qualified. Important numbers like this must be fair and accurate, they can’t be manipulated for political purposes.”

The president has the authority to replace political appointees, but tying the firing to a jobs report that reflects poorly on administration policies could inject more distrust in the data than revisions do.

“In theory, it’s allowed, in practice, it’s not a great thing,” Ethics and Public Policy Center fellow Patrick Brown told me.. “It seems like the definition of shooting the messenger… and that is dangerous to how the economy functions, but also what the function of government is supposed to be. It’s supposed to be about telling true stories, not just telling stories that are positive for the administration.”

What is the Bureau of Labor Statistics? The bureau is the fact-finding arm of the Department of Labor. Nearly 2,300 employees staff the bureau, led by a team of nine associate commissioners. The commissioner is the only politically appointed position. The bureau has a broad mandate to study and analyze labor economics and statistics. It does this by conducting monthly surveys to study job changes: who is hired, fired, or moving jobs. It also conducts surveys on pricing, which in turn contributes to the consumer price index, a key inflation marker. Its research also informs Social Security payments and cost-of-living adjustments.

“The Bureau of Labor Statistics is actually part of a very important underappreciated data infrastructure that our entire economy lives on,” George Washington University chairwoman of economics Tara Sinclair told me. She is one of the many who watch for the monthly data drop. For her, the data tell a story about how policies affect American workers.

“This is one of the key pieces of information that gives us a transparent measure of how policy is working,” Sinclair said. “The White House is right now producing a lot of economic policies. And data that’s being produced by our various statistical agencies, including the Bureau of Labor Statistics, is going to be used to evaluate the economic impact of those policies.”

Who was the fired commissioner? Erika McEntarfer served as the lead commissioner for BLS for just over a year and a half. Before that, she worked in the Census Bureau, the Treasury Department, and the White House Council of Economic Advisers. All were nonpolitical roles. Biden nominated her to serve as the BLS head in 2023. The Senate confirmed her in January 2024 in a 86-8 vote. Former Sens. J.D. Vance and Marco Rubio were among her yes votes. The commissioner is somewhat removed from the jobs report process. McEntarfer’s Trump-appointed predecessor, William Beach, said in a CNN interview that hundreds of staffers work on the numbers. The commissioner typically does not see the report until two days before its release.

So why were the numbers changed? Every monthly report includes a section to revise the previous two months because of lag time in the data collection, which is done by electronic and telephone surveys. Late respondents are added in as corrections to previously published reports. But the revisions to May and June were larger than usual. The original report for May showed U.S. employers added 144,000 jobs. The revision found the number was only 19,000 jobs added. June’s numbers went from 147,000 jobs to 14,000. The report said that revisions were based on new reports from businesses and government agencies, as well as a recalculation of seasonal factors.

“When you’re concerned, as I am, about families and affordability and being able to support our family, you need to be able to see when the red light on the dashboard starts blinking,” Brown said. “And that’s what we saw in this most recent job report.”

While revisions are common, the scale of this most recent one raises concerns about the effect of the Trump administration’s economic policies on job growth and inflation.

“We typically see these substantial negative revisions when the economy is turning downward,” Sinclair said. “We get more delayed information from businesses when things are bad.”

Could the data be manipulated? Trump has taken a skeptical eye to the monthly reports. In a Truth Social post, he noted that the jobs report had higher numbers right before the presidential election and then revised them down after he won. He said McEntarfer chronically miscalculated and suggested it was for political reasons. White House economic adviser Kevin Hassett said that the president wants “his own people” installed so that the data is more reliable. He said in an NBC interview on Sunday that the firing was prompted not only by the Aug. 1 release but also by a longer-term concern about the monthly revisions.

“There have been a bunch of patterns that could make people wonder,” Hassett said. “And I think the most important thing for people to know is that it’s the president’s highest priority that the data be trusted and that people get to the bottom of why these revisions are so unreliable.”

Sinclair said she thinks data manipulation is unlikely because it would require large-scale collaboration and be relatively easy to detect.

“Researchers such as myself are constantly studying this data, and we’d really have incentive to find something scandalous,” Sinclair said. “It would make my career. But we haven’t found any evidence of nefarious manipulation of the data.”

On Thursday afternoon, Trump invited Heritage Foundation economist and former economic adviser Stephen Moore to the Oval Office. Moore gave a brief news conference and said that he had new but unpublished data that compared median household income to the Biden and Trump administrations. He said the BLS overestimated job creation by 1.5 million jobs during the last two years of the Biden administration. Moore did not clarify whether these are numbers that the BLS eventually revised.

“If it was an error, that would be one thing, but I don't think it's an error. I think they did it purposely,” Trump said.

“You may well be right,” Moore said. “But even if it wasn’t purposefully, it’s incompetent.”

What happens next? Trump installed deputy commissioner Bill Wiatrowski as the acting commissioner. He said he would nominate McEntarfer’s replacement sometime this week. The next Federal Reserve decision could be based on the most recent jobs report. Federal Reserve Chairman Jerome Powell has repeatedly rebuffed Trump’s requests to lower interest rates, but the downturn in jobs could force his hand. Right now, interest rates remain moderately high. Powell said he and the other Fed governors are concerned that tariffs will drive up inflation. But lower interest rates could help the labor market. If the Fed keeps the rates the same, inflation could hold steady, but unemployment could increase. The next policy meeting is in September.