Saturday, August 16, 2025
View Larger +
Gary Sasse, former RI Director of Administration PHOTO: GoLocal
The federal Bureau of Labor Statistics (BLS) publishes statistical reports that business and government decision-makers utilize to make economic choices.
Recently, the BLS reported that over the past three months, the American job market had cooled. In July, 73,000 jobs were created; far less than the 110,000 predicted. Downward revisions for May and June totaled 258,000 jobs, erasing almost 90 percent of the previously reported employment gains.
GET THE LATEST BREAKING NEWS HERE — SIGN UP FOR GOLOCAL FREE DAILY EBLAST
Because these results differed from President Trump’s economic message, the BLS Commissioner was summarily dismissed. No evidence was presented that the Commissioner manipulated statistics. Nevertheless, the President accused her of rigging the numbers “to make ME look bad.” This decision and its justification jolted confidence in the credibility of U.S. economic data.
Since the Great Depression, business, government, and individuals have used BLS statistics as the gold standard in their economic decision-making. Today, many employers may be anxiously rethinking future investment, pay, and hiring decisions if they believe that they can no longer trust federal employment statistics.
This is not to suggest that BLS measurements of economic activity should not be subject to intense scrutiny. Of course they should. In recent years labor market reports have become more volatile due to declining survey participation, uncertainties related to trade policy, and extraordinary events such as the pandemic and Great Recession. However, efforts to improve economic reporting must distinguish between valid methodological concerns and blatant partisan attacks.
The BLS monthly jobs report is generated by two surveys. A household survey which deals with demographics and unemployment rates, and a business survey that focuses on pay, hours worked and job losses and gains. BLS’s initial monthly jobs report is subject to revisions as more complete information becomes available. For example, BLS surveys 560,000 businesses monthly, but it is reported that only about 60 percent respond prior to the release deadline. Two revised monthly reports are issued with the final one reflecting the most comprehensive picture of payroll information.
According to the Journalist’s Resource, a project of Harvard’s Kennedy School of Government, “It is not uncommon for preliminary estimates to be revised in the final revisions within a wide range, usually increasing or decreasing by up to 100,000 jobs”. When job numbers are revised downward, it is a sign that the job market is shrinking. Upward revisions indicate a stronger labor market than was previously reported.
The 258,000 downward employment revisions for May and June were historically significant but not unprecedented. There was a downward revision of 143,000 jobs in March 2009 due to the Great Recession, and 679,000 in March 202,0 attributed to poor survey responses during the pandemic.
These significant revisions suggest that the way BLS prepares its reports could be improved to better capture current economic conditions on a timelier basis. Modernizing and reinventing BLS’s economic information systems will be expensive and complex. However, this investment is necessary to improve the accuracy, timeliness, and public confidence in government-generated economic data.
Erica Groshen, who served as BLS Commissioner from 2013-2017, says there are better ways to collect data for job reports. A first step would be to create a joint Presidential/Congressional Commission composed of economists, data scientists, business, and labor employment experts. This Commission’s mission would include the following; prepare a strategic plan to update data collection and expand digital reporting, clean up the lag-data collection issues resulting from incomplete surveys, use AI to enhance real time data, improve transparency and communications, codify the political independence of the Commissioner, and establish an independent audit board to review BLS methods and practice to ensure accountability.
Accurate government economic reports are the foundation of sound economic decision-making and democratic accountability.
Gary Sasse served as Director of the Rhode Island Department of Administration and Revenue, and President of RIPEC.
Related Articles
Enjoy this post? Share it with others.