Donald Trump’s dismissal two weeks ago Bureau of Labor Statistics Commissioner Erika McEntarfer and nomination of EJ Antoni as her replacement is generating plenty of “inside baseball” chatter among the political class.
But did the president — as uncouth and ham-handed as his methods are — stumble upon a truth that was hiding in plain sight: that the government economic data relied upon by markets and business leaders for the allocation of hundreds of billions in capital just isn’t very accurate?
“I probably would have fired the head of the Bureau of Labor Statistics too,” wrote Ray Dalio, founder and now former CEO of hedge fund giant Bridgewater. “Its process for making estimates is obviously obsolete and error-prone, and there is no good plan in the works for fixing it,” he continued.
Dalio noted that the massive downward revisions in May and June employment data included with the July report were “symptomatic” of the rot within the BLS. Private estimates, said Dalio, were far better. “I know a lot about because of how I use data to follow the economy and bet on where it’s going,” he said.
Trump’s nominated replacement atop the BLS, EJ Antoni, has called the agency’s data “BS” and earlier this week suggested suspending monthly employment reports in favor of quarterly releases until improvements can be made.
The BLS produces not just employment data, but also the Consumer Price Index, which for many years has faced criticism from all quarters for not accurately describing the inflation pressure felt by Americans.