Elon Musk’s Department of Government Efficiency (DOGE) may have completed much of its cost-cutting agenda, but its ripple effects are still being felt. Mark Zandi, chief economist at Moody’s Analytics, flags deeper risks stemming from DOGE’s workforce reductions: slashing jobs at federal statistical agencies is already eroding the quality of government data—a sign of more far-reaching consequences for public services.

“Government workers have important jobs that are critical to providing important services to taxpayers,” Zandi told me. “If jobs are cut and those services aren’t provided or aren’t provided in a timely and competent way, there can be significant negative fallout.”

Regarding the quality of data, the release of the Bureau of Labor Statistics'(BLS) report last week resulted in intense scrutiny. President Trump on Aug. 1 ordered the firing of Erika McEntarfer, the commissioner of the BLS.

According to the BLS, July’s employment report showed only 73,000 new jobs, while job gains from May and June were sharply revised downward by a combined 258,000. This brought the three-month average monthly payroll growth down to just 35,000, compared to 123,000 a year earlier.

However, Zandi points to DOGE’s cuts as a key driver of these revisions: Workforce reductions mean payroll data from agencies often arrives late, leading to large, after-the-fact corrections. 

“This didn’t matter much when government employment was stable, but now that government jobs are declining, the cuts are being picked up in the revisions,” Zandi said. 

The impact extends to the statistical agencies themselves; understaffed teams struggle to process employment data promptly, which in turn causes even bigger subsequent revisions, he said. Investing in reliable data and the people who collect it is a foundation for smart decisions and economic resilience, according to Zandi.

In times of uncertainty, the value of good data cannot be overstated: It is an indispensable compass for leaders.

Sheryl Estrada
sheryl.estrada@fortune.com

Leaderboard

Vaibhav Agarwal was promoted to CFO of RingCentral, Inc. (NYSE: RNG), an AI-powered business communications provider, effective immediately. Agarwal, who has been with RingCentral since 2016, will succeed Abhey Lamba, who will continue to serve as an executive advisor through the end of the year. Agarwal had a nine-year tenure in prior roles as deputy CFO, chief transformation officer, and chief accounting officer. 

Jennifer Fall Jung was appointed CFO and secretary of Sportsman’s Warehouse Holdings, Inc. (Nasdaq: SPWH), effective Aug. 18. Fall Jung will succeed Jeff White, who will serve in a consulting role to assist with the transition until Sept. 9. Fall Jung has over 25 years of experience, previously serving as EVP and CFO of The Duckhorn Portfolio, Inc. and CFO of Funko, Inc., a publicly traded consumer goods company. Before that role, he held a variety of roles at The Gap, Inc., including CFO and SVP of Old Navy Global Stores and Online.

Big Deal

Digital upskilling is no longer just for tech teams. “We’re All Techies Now: Digital Skill Building for the Future,” a report by McKinsey, examines how collectively increasing technology skills can make companies more competitive.

“Now more than ever, for organizations to perform at their best, all employees need to be techies,” according to McKinsey. This includes executives, who must become more tech-savvy as business leaders are increasingly responsible for delivering tech-enabled products. Doing so requires a broader and stronger technical foundation across the organization.

McKinsey outlines new approaches for enhancing employees’ technical skills to improve productivity and performance, as well as retaining top talent.

Going deeper

"How Aravind Srinivas turned Perplexity AI into an $18 billion would-be Google killer" is a Fortune feature article by Jeremy Kahn. 

Kahn writes: "Google’s share of search traffic dropped below 90% at the end of 2024, according to data from Statcounter, the first time it dipped below that threshold in 15 years. While the threat from ChatGPT has been the primary driver of these traffic changes, Perplexity pioneered many of the AI search features that both Google and OpenAI have more recently rolled out.

"Now Google may have to dance to Perplexity’s tune once again. The startup just launched an AI-native web browser called Comet that could represent the biggest shift in how we interact with the internet since Netscape popularized the graphical web browser in the mid-1990s."

Overheard

"Our bullish view is that investors are still not fully appreciating the tidal wave of growth on the horizon from the $2 trillion of spending over the next 3 years coming from enterprise and government spending around AI technology and use cases."

—Wedbush Securities tech analysts wrote in an industry note on Tuesday.