Who would have ever looked for Drama at the BLS? Bean counters rarely attract much attention; not too many TV series feature accounting firms. Maybe l’affaire McEntarfer will change all that.
Of course Democrats are outraged that President Trump fired Erika McEntarfer, the head of the Bureau of Labor Statistics. And, really, it is not a good look to shoot the messenger who brought a bad employment number, even if you’re angry as Hell about the monster downward revision that torched the last few months’ jobs tally.
I doubt the jobs numbers were fudged by the BLS, as President Trump has suggested. But badly monitored? Without a doubt. It’s perfectly ok to ax the head of the bureau for incompetence, which appears warranted. Let’s review:
- Much of the 258,000 downward revision in the May and June job totals were due, we are told, to seasonal adjustments. Why would those adjustments change that dramatically…and often? We know that millions of young people get out of school in the spring months and get jobs; that is as normal a phenomenon as Christmas hiring in December by retail stores. It happens every year, so why would the BLS be blindsided? If their models are broken, fix them.
- Some of the problem seems to have come from poor responses on the surveys that the government conducts to gather the data. The number of establishments answering questions about their hiring has steadily declined, making our official records less reliable. Guess what? That can be and should have been fixed. Perhaps it’s a matter of reaching out via social media; maybe they need a personal appeal from the head of the agency. But without a doubt this should have been addressed over the past post-Covid years.
- During Joe Biden’s presidency, there were huge revisions to the jobs numbers, routinely. Between March 2023 and March 2024, the BLS announced, that job additions were overstated by 818,000! All those peachy jobs reports from the Biden White House were as fake as Elizabeth Warren’s Native American heritage. In 2024, the jobs reports were revised downward for 10 months. In June 2023, for instance, rather than adding 209,000 jobs, we actually only put 105,000 people to work. Even Jay Powell expressed skepticism when the BLS said we added 272,000 jobs in June 2024, saying he thought the number “might be a bit overstated.” Why didn’t the officials address these issues then?
More embarrassing is that during the past few years there opened a yawning divide between the Establishment Survey, which comes from businesses, and the Household Survey. As of this time last year, the Household Survey indicated there had been virtually zero jobs added over the prior 12 months, while the Establishment Survey showed a gain of 2.5 million. The reason I believe is that the former counts people being employed while the latter tallies the number of jobs being filled. So, under the Biden economy, as inflation soared and people took multiple jobs to make ends meet, the Establishment Survey presented a rosy picture, and over-counted jobs.
This discrepancy has narrowed, so that the two surveys today show similar numbers of total employment. Why did that change? We have no idea.
Meanwhile, the Fed, investors, companies and homebuyers are all in the dark. I do not think the numbers have been “fudged”; I just think we’re doing a lousy job of monitoring our economy. It is entirely reasonable to put a new team in place to get it right. It is important.
