Marketplace Morning Report: When Government Data Is Called Into Question

Released on August 14, 2025 | Host: David Brancaccio, Marketplace

In this episode of Marketplace Morning Report, host David Brancaccio delves into pressing economic issues, including unexpected inflation rates, potential shifts in Federal Reserve policies, challenges facing government data integrity, and a resurgence in adjustable rate mortgages. The episode features insights from economists Diane Swonk of KPMG, Michael Strain of the American Enterprise Institute, Claudia Sahm of New Century Advisors, and reporter Daniel Ackerman, among others.

1. Inflation Surges Beyond Expectations

[00:01]
David Brancaccio opens the episode by highlighting a concerning spike in wholesale inflation. "A flare of inflation at the wholesale level," he notes, emphasizing that inflation rates soared between June and July by an unexpected 9-10%, tripling economists' projections.

[00:29]
Diane Swonk, Chief Economist at KPMG, provides context:
"The data suggests that firms are actually passing along higher prices onto consumers and that their margins actually widened. So that's important to watch..."
She explains that while consumer inflation remained relatively controlled, the underlying wholesale inflation trends indicate a broader inflationary pressure that could influence future economic policies.

2. The Federal Reserve's Interest Rate Decisions

[00:57]
Brancaccio transitions to the implications of rising inflation on monetary policy. He poses a critical question: Could the unexpected wholesale inflation delay the Federal Reserve's planned interest rate cuts?

[01:09]
Swonk elaborates on market expectations:
"Financial markets had hoped that they would do a half percent cut, and the Fed has been saying they're not sure about what size cut, but it's probably not going to be an outsized cut in September or it's not a slam dunk that we have a cut in September as well."
She suggests that the Federal Reserve may need to reassess its strategies in light of the new inflation data, indicating potential adjustments to their interest rate policies in upcoming meetings.

3. Scrutiny Over Government Data: The BLS Leadership Void

[01:37]
Brancaccio shifts focus to a significant development within the Bureau of Labor Statistics (BLS). The agency, responsible for critical economic indicators like hiring and unemployment rates, remains leaderless after President Trump dismissed Commissioner Erica McIntarfer on August 1st. Trump alleged that the "monthly jobs numbers, which were revised downward, were rigged to make them look bad."

This leadership vacuum has cast doubt on the reliability of BLS data, prompting businesses and policymakers to seek alternative data sources for making informed decisions.

4. The Rise of Private Economic Data Sources

[02:09]
Reporter Daniel Ackerman explores the implications of questioned government data by examining the role of private economic data providers.

[02:12] – [03:19]
Kurt Barton, CFO of Tractor Supply, discusses the importance of location-specific data for retailers:
"Location is everything for a retailer like Tractor Supply. We serve customers in only certain geographies... They can parse that for ex-urban and rural, even in some cases to the zip code level."
Michael Strain from the American Enterprise Institute adds:
"This kind of specificity is a big reason there's a market for private economic data."

Claudia Sahm, Chief Economist at New Century Advisors, underscores the complementary role of private data:
"It's an extremely helpful complement to government statistics. You can get some really good information about the labor market, for example, from companies like Indeed or ADP."
However, she cautions that private data cannot fully replace government statistics:
"Government data, including BLS data, really are the gold standard... They are freely available to the public and use sampling methods to reflect economic conditions nationwide."

Ackerman summarizes the dependency on high-quality government data:
"The reality is the high quality private sector data that are being produced, they depend on the high quality government statistics."
He warns that any reduction in government data quality could lead to suboptimal decision-making by businesses and policymakers.

5. The Resurgence of Adjustable Rate Mortgages

[04:49]
Transitioning to the housing market, Brancaccio introduces the topic of adjustable rate mortgages (ARMs) making a comeback. According to the Mortgage Bankers Association, ARM applications surged by 25% last week, reaching the highest levels in three years.

[05:14]
Marketplace’s Matt Levin reports on consumer attitudes toward ARMs:
"If the phrase adjustable rate mortgage triggers your late 2000s financial crisis PTSD, you're not alone."
He recounts the story of Amy Moreno, a loan officer in southeast Arizona, who encountered resistance from potential homeowners wary of ARMs due to past financial crises.

[05:45]
Levin explains how ARMs have evolved:
"Adjustable rate mortgages have changed since the aughts. You typically lock in that cheaper intro rate for a longer period of time, 5, 7, 10 years, and borrowers now are vetted better."
Economist Joel Kahn from the Mortgage Bankers Association attributes the renewed interest in ARMs to buyers seeking cost savings:
"ARMs are regaining popularity because home buyers are searching for any savings they can get."

Claudia Sahm adds:
"People are looking for a slightly lower rate option to the extent that they can because some of these markets still have pretty high home prices."
Levin concludes that despite the uncertainty of future interest rates, borrowers are willing to take the risk in hopes that rates will stabilize or decrease:
"ARM borrowers today won't benefit from any predicted Fed cuts this year, but they're willing to take the risk that in the future rates won't be higher than they are right now."

Conclusion

In this episode, Marketplace Morning Report provides a comprehensive overview of current economic challenges, from unexpected inflation rates influencing Federal Reserve policies to the critical role of government data and the resurgence of adjustable rate mortgages in the housing market. Through expert analysis and on-the-ground reporting, listeners gain a nuanced understanding of how these factors interplay to shape the economic landscape.