Analysts predict that this year will see additional revisions to U.S. job statistics, following some significant downward adjustments that clearly frustrated President Donald Trump. In response to these discrepancies, he decided to remove the nation’s chief employment statistician from her position.
Goldman Sachs shared a note over the weekend pointing out that the Bureau of Labor Statistics (BLS) is set to release preliminary adjustments in September. These changes could reflect a drop of anywhere from 550,000 to 950,000 jobs for the 12-month stretch ending March 2025.
Why Should We Care?
Even though this timeline overlaps more with Joe Biden’s presidency than Trump’s second term, these massive revisions contribute to a larger narrative being spun by the White House about the agency’s reliability.
After a disappointing job report mentioned last Friday coupled with considerable modifications to earlier data collections, Trump publicly accused BLS commissioner Erika McEntarfer of distorting information to cast his administration in a bad light, resulting in her firing.
This backlash has been widely condemned by political figures from both parties, fearing it may compromise the credibility and autonomy of the BLS. Nonetheless, the administration continues to refer to persistent inaccuracies in the agency’s data as a justification for these actions.
Key Points to Remember
Just last Friday, the BLS disclosed its July non-farm payrolls report, showing a mere addition of 73,000 jobs, falling short of the forecasted 110,000. Additionally, revisions to data from May and June adjusted downward by a total of 258,000 jobs.
Stunned by the revelations, Trump declared he would be terminating McEntarfer “immediately” and sought to replace her with “someone much more competent and qualified.” Without presenting any proof, he claimed the figures for July were manipulated to make the Republicans and himself look unfavorable.
He highlighted major revisions the BLS encountered during McEntarfer’s tenure. Notably, last August, the agency identified that the economy had ostensibly generated 818,000 fewer jobs than was originally reported for the year ending March 2024, leading to a later adjustment that indicated a prior overestimation of 598,000 jobs.
Trump mistakenly d this revision a “record” when, in fact, the final revision in 2009 resulted in a 902,000 adjustment and suggested that these revisions were part of a ploy to bolster chances for Democrats in the 2024 elections.
If Goldman Sachs’ high-end estimate of a 950,000 reduction is accurate, it would stand as the largest downward revision since records began in 1979.
The Reaction
Jan Hatzius, Goldman Sachs’ chief economist, stated to CNBC on Friday that revisions to May and June data likely indicate the Federal Reserve will consider lowering interest rates in their upcoming meeting this September.
He noted, “This is significant data. However, it’s just a snapshot. We’ll need to wait and observe trends over the next couple of months. If it turns out that the labor market is indeed slowing, then I would wager we should aim to return to neutral relatively soon.”
The White House issued a press release on Friday highlighting: “A long-standing history of inaccuracies and incompetence from Erika McEntarfer has significantly damaged the public’s trust in the Bureau of Labor Statistics, an agency crucial for providing data that policymakers and businesses rely on for decisions that matter.”
Polling expert Nate Silver added in his Sunday newsletter: “Firing the BLS commissioner won’t alter the consequences of tariffs; however, it will diminish American economic authority while creating uncertainty for various stakeholders, including businesses and workers.” He also reflected, “I don’t precisely predict where this event falls in terms of Trump-related controversies. Even with a competent successor to McEntarfer, it could hinder the BLS and similar agencies from functioning autonomously.”
What’s Next?
This past Sunday, Trump mentioned he would reveal a new BLS commissioner “within the next three to four days.” Meanwhile, Secretary of Labor Lori Chavez-DeRemer has stated that Deputy Commissioner William Wiatrowski will serve as the acting commissioner in the meantime.
