On 1/8/2025, US President Donald Trump dismissed Erika McEntarfer, head of the Bureau of Labor Statistics (BLS). This action followed the BLS report showing the US economy added only 73,000 jobs in July, far below expectations, and significantly revised down job figures for the previous two months.

President Trump alleged the BLS manipulated the job figures to make him and the Republican Party "look bad", adding that the US economy was actually growing strongly during his term. He offered no evidence for this accusation.

Economic and policy experts immediately objected, arguing Trump's decision threatened the transparency of data from an independent agency within the federal government.

"This is unprecedented and raises concerns about the transparency of US data going forward," Heather Long, chief economist at NFCU, a federal credit union serving members of the US military, wrote on X.

US President Donald Trump in Allentown, Pennsylvania on 3/8. Photo: AP

US President Donald Trump in Allentown, Pennsylvania on 3/8. Photo: AP

Established in 1884, the BLS is part of the US Department of Labor but operates independently. It provides data on employment, prices, earnings, and other issues, and is considered one of the most expert statistical agencies in the world. Independent and accurate data is crucial for both the public and private sectors in the US to make decisions on investment, hiring, spending, and other activities.

The Federal Reserve (Fed) relies on BLS inflation and unemployment data to adjust interest rates, which can cause trillions of dollars in global market fluctuations.

"Accurate data is not only useful for the Fed, but also for the government and the private sector," Fed Chair Jerome Powell said at a recent press conference. "The US has led on this for the past 100 years and I think we need to continue to maintain that position."

Trump recently repeatedly attacked Powell and urged the Fed to cut interest rates to boost the economy, but without success, as the agency operates independently of the executive branch. Therefore, his dismissal of the BLS head further worried the market.

"The market fears political factors could interfere with future economic decisions," Ma Yung-yu, chief investment strategist at PNC Asset Management Group, told the Straits Times. "They are unsure of the next steps. Will Trump fire Powell?"

Ma noted the US economy is facing a "negative spiral" of slowing growth and rising inflation.

Statisticians and former officials under both Democratic and Republican presidents said Trump's accusations of "data distortion" against McEntarfer were inappropriate. The BLS head cannot control the data the agency collects or know the information in advance, until staff have compiled and analyzed it.

Erica Groshen, BLS head under Barack Obama, said she once faced opposition from staff when she wanted to make the language in the jobs report "more vivid." They emphasized the BLS's job is not to comment on whether "the glass is half full or half empty," but only to reflect the data.

"The glass has eight parts and there are four parts of water," Groshen exemplified the BLS's data reporting method.

However, this does not mean politics cannot interfere with BLS operations, as federal government statistics rely on hundreds of methodologies, many of which involve professional judgment, with no absolutely correct answers.

The BLS head could slowly adjust the data in a politically advantageous direction, without making any overly obvious decisions, US media warned.

"I can imagine a new BLS commissioner trying to change statistical methods and processes to shape the data in a certain way," said Katharine G. Abraham, former BLS head under Bill Clinton and George W. Bush. "They would have to understand very well where to put their finger on the scale."

Experts warn that political leaders' attempts to interfere with government data rarely yield good results. They expressed concern that the US could follow in the footsteps of Argentina or Greece, especially with the world's largest economy's record-high public debt.

In 2010, upon becoming president of the Hellenic Statistical Authority (ELSTAT), Andreas Georgiou discovered the agency had seriously underreported the budget deficit. This misreporting contributed to the worsening of the Greek debt crisis, forcing Athens to receive multiple financial bailouts from international organizations, but ultimately defaulting in 2015.

He corrected the 2009 fiscal deficit from 3.9% to about 15.4% of GDP, in line with Eurostat standards. This restored EU confidence in Greece but also made him the focus of internal controversy.

Greek officials tried to prosecute Georgiou years later for allegedly inflating the budget deficit, even though independent investigations confirmed his findings.

Georgiou remained steadfast, emphasizing the importance of reliable statistical data for policymaking and democracy. The attempt to prosecute him severely damaged Greece's international credibility.

In 2007, Argentinian President Kestor Kirchner dismissed the mathematician in charge of consumer price index statistics and then announced a much lower inflation figure than his calculations.

This action caused Argentinians and international investors to lose faith in the government's statistical data, forcing them to seek independent sources. Buenos Aires' credibility declined, increasing its borrowing costs, exacerbating the debt crisis, and leading to Argentina's default.

"Government statistics are a mirror reflecting society," according to Georgiou. If that mirror is distorted or broken, society cannot identify problems or find appropriate solutions. "And from there, it cannot choose the right people to solve them."

Bureau of Labor Statistics head Erika McEntarfer at a 2024 event. Photo: US Department of Labor

Bureau of Labor Statistics head Erika McEntarfer at a 2024 event. Photo: US Department of Labor

It is too early to determine whether the US will follow the path of Argentina and Greece. However, economists say the decision to dismiss McEntarfer is a worrying step in that direction.

According to former US Treasury Secretary Janet Yellen, such dismissals should not happen in the world's leading economy. "That's something you think could only happen in a weak country," Yellen said.

Kevin Hassett, director of the US National Economic Council, said on 3/8 that President Trump "was right" to fire McEntarfer and called for the appointment of a new BLS head. "I think what we need is a fresh perspective at the BLS and someone who can address this issue," Hassett said.

But Rand Paul, a Republican senator representing Kentucky, questioned whether removing McEntarfer was an effective way to improve the numbers.

"We have to look for objective data somewhere," he said. "When the data provider is fired, it's hard to believe that the numbers released afterward are not politicized."

Nhu Tam (According to Reuters, AFP, Washington Post)