President Donald Trump’s decision to fire Erika McEntarfer, the commissioner of the Bureau of Labor Statistics (BLS), last Friday after a dismal jobs report is drawing criticism not just from his usual opponents, but also from his allies.
Stephen Moore, President Donald Trump’s former economic advisor, told Fortune that firing McEntarfer when he did was akin to “firing the referee because you don’t like the way the game turned out.”
“I’m not here to defend Trump,” Moore, who was also Trump’s onetime nominee to serve as a Federal Reserve governor, added. “But I do think he should have fired her a long time ago, because the numbers that have been coming out now for the last several years have just not been an accurate gauge as to what’s really going on in the economy.”
Trump became incensed with McEntarfer after the new report significantly revised U.S. jobs figures from May and June, slashing some 258,000 jobs combined for those months. The revision constitutes the largest downward revision to the jobs numbers in almost 60 years.
The president wrote in a Truth Social post Friday that McEntarfer, a Biden administration appointee, “manipulated” and “faked” the jobs report numbers for political gain. He said he would replace her with someone “more competent.”
Transitioning away from survey data
Moore, while disagreeing that the numbers were manipulated, concurred with Trump that the BLS needs a new “Mr. Fix-It” to head the bureau. He said that in his 40 years of working in economic research, he had never seen the jobs numbers become so unreliable.
Recent economic data is plagued by the same issue as political polling data: Nobody wants to pick up the phone anymore, Moore said. The monthly jobs report relies heavily on surveys of businesses and households, which worked when everyone used landline phones, but is less reliable in the digital age.
“The procedures the BLS is using are 75 years old,” Moore added. “They need to be completely revamped.” The pandemic appears to have accelerated the trend of people ignoring pollers’ calls. Before 2020, response rates to the Current Employment Statistics surveys—which the BLS uses to compile the monthly jobs report—hovered around 60%. It has since declined to 45%.
Days before Trump fired McEntarfer, a bipartisan group of economists—including Nobel Laureate Paul Romer—wrote a letter to Congress asking for funding to modernize the data-collection process.
Agencies need the space and money to “restore” survey response rates, while also experimenting with new means of data collection, the economists argued.
“Transitioning to a system in which less survey data is blended with more administrative and private sector data, while preserving data integrity and privacy standards, is the generationally important task facing statistical agencies today,” the economists wrote.
However, researchers at the San Francisco Federal Reserve, who studied survey responsiveness earlier this year, found that while declining response rates present concerns for the reliability of data, it didn’t necessarily lead to larger-than-average revisions to reports like the monthly jobs report.
Claire Mersol, an economist at BLS, told the Wall Street Journal that much of the revisions done to the previous numbers were part of “routine recalculation of seasonal factors.”
“Typically, the monthly revisions have offsetting movements within industries—one goes up, one goes down,” Mersol said. “In June, most revisions were negative.”
In other words, the sharply negative revisions could have just been chance.
Even if the data has become more unreliable, some Republican allies of the president said that firing the head of the BLS would do little to fix the problem. Sen. Rand Paul, a Republican from Kentucky, told NBC News that he questioned how the move would improve BLS’s accuracy.
“I’m going to look into it, but first impression is that you can’t really make the numbers different or better by firing the people doing the counting,” he said.
GOP Sen. Lisa Murkowski from Alaska said that she doesn’t trust the numbers, but the move makes it worse.
“And when you fire people, then it makes people trust them even less,” she said.
