The Politicization of US Economic Data – Bureau of Labor Statistics Commissioner Fired

Department of labour statistics

Friday morning, the Bureau of Labor Statistics (BLS) released a jobs report that landed with a thud: just 73,000 new jobs in July, a number so anemic it sent the Dow tumbling over 500 points and the Nasdaq down more than 2%.

By lunchtime, President Donald Trump had fired BLS Commissioner Erika McEntarfer, a Biden appointee, in a move that stunned economists, market watchers, and even some of his own allies. The official reason? Trump accused McEntarfer of ā€œfakingā€ jobs numbers and manipulating data for political purposes, a claim for which he offered no evidence but plenty of social media firepower.

The Numbers Behind the Drama

The July jobs report was a gut punch: not only did it show the weakest job growth since the early pandemic, but it also revised the previous two months downward by a combined 258,000 jobs. The three-month average now sits at a paltry 35,000, a figure that would have been unthinkable just a year ago. For context, the BLS’s revisions were the largest since the chaos of spring 2020. The White House, which had just weeks earlier touted a ā€œJune Boom,ā€ was left scrambling for explanations as markets reeled and investors questioned the reliability of the data.

Trump’s Rationale: Data or Drama?

Trump’s public rationale for the firing was blunt: ā€œWe need accurate Jobs Numbers. I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY,ā€ he posted on Truth Social. He went further, accusing McEntarfer of manipulating the numbers to help Kamala Harris’s election chances, a conspiracy theory that ricocheted through cable news and social media. The BLS, for its part, confirmed McEntarfer’s termination and named Deputy Commissioner William Wiatrowski as acting chief.

But the real story is more complicated. The BLS has faced mounting challenges: declining survey response rates, budget cuts, and a growing reliance on imputed data. The response rate for the jobs survey has dropped from over 80% in 2020 to just 67% this summer, raising questions about the precision of the numbers. Trump’s own budget proposed an 8% staff reduction at the bureau, further straining its ability to collect and analyze data.

Independence Under Fire

The firing of McEntarfer is unprecedented in modern American history. The BLS, like the Census Bureau or the Federal Reserve, has long been insulated from political interference. Its data is the bedrock for everything from interest rate decisions to wage negotiations. William Beach, McEntarfer’s predecessor and a Trump appointee, called the firing ā€œtotally groundlessā€ and warned it ā€œundermines the statistical mission of the Bureau.ā€ Economists across the spectrum echoed his concerns, with Harvard’s Jason Furman warning that politicizing economic data is a ā€œself-defeating actā€ that risks eroding the credibility of America’s economic statistics.

Markets, the Fed, and the Road Ahead

The timing of the firing couldn’t have been worse for markets already rattled by new tariffs and uncertainty over Federal Reserve policy. Trump’s move came just days after the Fed held interest rates steady, with Chair Jerome Powell resisting pressure to cut. The weak jobs report has now put a September rate cut back on the table, but the sudden ouster of the BLS chief has injected a new layer of uncertainty. Investors, already skittish, are left to wonder: can they trust the numbers coming out of Washington?

A Moment That Will Echo

In the end, the firing of Erika McEntarfer is about more than one jobs report or one official. It’s a test of whether the institutions that underpin American economic life can withstand political pressure. The BLS has always been a quiet, behind-the-scenes player. On Friday, it became the main character in a drama that’s far from over.