Can ... we still trust the monthly jobs report?

Summary

Can We Still Trust the Monthly Jobs Report?

In the March 7, 2025 episode of "The Indicator from Planet Money" titled "Can ... We Still Trust the Monthly Jobs Report?", hosts Darian Woods and Waylon Wong delve into the reliability of one of the United States' most critical economic indicators: the monthly jobs report produced by the Bureau of Labor Statistics (BLS). This comprehensive analysis addresses recent challenges facing the integrity of this data, expert insights on safeguarding its accuracy, and the broader implications for policymakers and the economy.

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1. The Latest Jobs Report: A Snapshot of the Labor Market

The episode opens with a presentation of the latest statistics from February's jobs report:

• 151,000 jobs added to the US economy.
• Unemployment rate edged up slightly to 4.1% from 4% in January.

Darian Woods emphasizes the significance of this report:
"The monthly jobs report is one of the major economic indicators that we rely on the government to produce. And generally, we trust that this data gives us an accurate snapshot of how US Workers are doing." (00:33)

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2. Erosion of Trust in Government Data

Recent developments have cast doubt on the reliability of government-produced economic data. The episode highlights several alarming trends:

• Government Data Disappearances: Sensitive information has been vanishing from public websites.
• Unauthorized Access: Entities like Doge have reportedly gained access to confidential data.
• Disbanded Committees: Commerce Secretary Howard Lutnick has dissolved two advisory committees overseeing economic data integrity and proposed changes to GDP calculation methods.

Darian Woods brings attention to these issues:
"The monthly jobs report is one of the major economic indicators that we rely on the government to produce. And generally, we trust that this data gives us an accurate snapshot of how US Workers are doing." (00:33)

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3. Expert Insights: Erika Groschen on Trust and Safeguards

To unpack these concerns, the podcast features Erika Groschen, a former commissioner of the BLS and a member of one of the disbanded committees. Groschen underscores the foundational role of trust in statistical agencies:

"If people don't trust the data, then you might as well not produce it." (01:26)

She elaborates on the robust safeguards in place to maintain data integrity:
"It's built into the directives on how you how the statistical agencies operate. It's built into the law. It's built into this great publication called Principles and Practices for a Statistical Agency." (04:06)

Groschen likens the safeguarding measures to everyday security practices:
"It's front and present all the time. Not because you're always fighting an active threat, but because everybody just knows that it's so important. The same way that people lock the door at night and do other things to make sure that they're warding off threats." (04:19)

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4. Potential Manipulation of Data Releases

One of Groschen's primary concerns is the manipulation of data release schedules. Altering when data is released could allow for market manipulation, either by burying unfavorable news or prematurely announcing positive figures. Woods references a past incident to illustrate this risk:

"Like last year, a BLS data release didn't happen as scheduled. People from a couple investment banks then reportedly called the agency and got someone to tell them the numbers. This had other people in the market crying foul that some people got the information early and could potentially trade on it." (06:18)

Groschen warns against unauthorized individuals attempting to change data calculation methods, expressing fear that overconfident individuals might undermine established processes:
"I worry about hubris that some person who feels they're very smart may feel, gee, the BLS shouldn't be doing it that way. They may have all their explanations for why they do it that way. But I'm smart, and I think it should be done this way." (07:10)

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5. Resource Constraints Threaten Data Quality

Another significant issue raised is the dwindling resources at the BLS. Since 2009, the Bureau's budget has shrunk by over 10% when adjusted for inflation. This reduction impacts both the quantity and quality of data collection:

• Fewer Staffers: Smaller teams struggle to maintain the same level of data collection and analysis.
• Declining Response Rates: Reduced participation can lead to smaller sample sizes, increasing the likelihood of errors.

Waylon Wong poignantly summarizes the consequences:
"Fewer people makes the job of collecting and analyzing survey data harder. And response rates for the surveys have already been declining. That's a problem because smaller sample sizes could lead to lower quality data with more errors." (08:00)

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6. The Importance of Demographic Data

Elise Gould, a labor economist at the Economic Policy Institute, voices concerns about the availability of detailed demographic data:

• Missing Data on Poverty by Race: Gould notes that crucial data vanished from public records, only to be restored later.
• Implications for Research and Policy: Without access to unemployment rates segmented by gender or race, understanding the economic challenges faced by different groups becomes significantly harder.

Gould emphasizes the necessity of comprehensive data:
"What I look for in the labor market is how is it affecting workers and their families, and you want to know how that affects not just the average, but different groups of people. Race and ethnicity and gender are very key indicators to know how people are doing in the economy." (08:45)

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7. Vigilance and the Culture of the BLS

Despite these challenges, both Groschen and Gould express confidence in the dedicated staffers at the BLS. Groschen asserts that vigilance is ingrained in the agency's culture:
"They can be undermined. It's like what parents tell their kids. Trust takes a long time to build up and it can be ruined in an instant." (09:42)

This steadfast commitment is crucial in maintaining the integrity and reliability of the jobs report, even as external pressures mount.

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Conclusion: The Fragile Trust in Economic Data

The episode concludes on a cautionary note, highlighting the fragility of trust in government-produced economic data. With potential manipulation and resource cuts threatening the quality and accessibility of vital statistics, the integrity of the monthly jobs report stands at risk. As Woods aptly puts it:
"Trust takes a long time to build up and it can be ruined in an instant." (09:42)

For policymakers, investors, and the general public, safeguarding the accuracy and reliability of such data is paramount, as it underpins critical economic decisions that affect millions of lives.

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Produced by: Angel Carreras
Engineered by: Gilly Moon
Fact-Checked by: Tyler Jones
Edited by: Cake and Cannon
Production: NPR

Transcript

[Waylon Wong]

Npr.

[Darian Woods]

This is the indicator from Planet Money. I'm Darian Woods.

[Waylon Wong]

And I'm Waylon Wong. It is jobs Friday. That means we have the latest numbers on the US labor market from the Bureau of Labor Statistics. The jobs report shows that 151,000 jobs were added in February. The unemployment rate nudged up to 4.1% from 4% in January.

[Darian Woods]

The monthly jobs report is one of the major economic indicators that we rely on the government to produce. And generally, we trust that this data gives us an accurate snapshot of how US Workers are doing.

[Waylon Wong]

But recently we've seen government data disappearing from public websites. We've seen Doge getting access to sensitive information. And in the past week, Commerce Secretary Howard Lutnick has disbanded two committees of outside experts that advise the government on economic data. He also talked about changing how gross domestic product gets calculated.

[Darian Woods]

And people like Erika Groschen are concerned. Erika is a former commissioner of the Bureau of Labor Statistics. She was also on one of the committees that Lutnick just nixed. Erica says that statistical agencies live and die by trust, trust that the data is both secure and free from political interference.

[Erika Groschen]

If people don't trust the data, then you might as well not produce it.

[Waylon Wong]

And this data is vital to the economy. The jobs report moves markets. The Federal Reserve and other decision makers use the information to shape policy that affects all of us.

[Darian Woods]

So today on the show, can we still trust official statistics like the monthly jobs report? Erica talks about the safeguards that are in place and shares her worries about the future integrity of government data.

[Michael Hosmar]

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[Waylon Wong]

The jobs report comes from two surveys that the BLS conducts, and they are built on trust. The people who answer the survey questions trust that their responses will be anonymized and used only for statistical purposes. And then the people who use that data, from policymakers to investors, trust the quality of that information.

[Darian Woods]

Erika Groschen served as BLS commissioner from 2013 to 2017. She says the BLS and other statistical agencies have a whole litany of procedures to safeguard this trust.

[Erika Groschen]

It's built into the directives on how you how the statistical agencies operate. It's built into the law. It's built into this great publication called Principles and Practices for a Statistical Agency.

[Waylon Wong]

That's exciting.

[Erika Groschen]

So it's front and present all the time. Not because you're always fighting an active threat, but because everybody just knows that it's so important. The same way that people lock the door at night and do other things to make sure that they're warding off threats.

[Darian Woods]

Here are some examples of those safeguards in practice. Erica says that when she was at the bls, only staffers tasked with data analysis could be in the rooms where that work took place. Even the janitors couldn't get into those rooms to enter.

[Waylon Wong]

As commissioner, Erica would only see the jobs numbers when they were final. She also learned early on in her tenure that the report had to be written in the most neutral terms. No spin allowed.

[Erika Groschen]

When I gave a talk, I would show the proverbial glass with some water in it and say, what's the BLS answer? Is this half full or half empty?

[Waylon Wong]

What's your answer, Darian?

[Darian Woods]

I know the exact answer to this. The BLS wants to say there is 150 milliliters of water here.

[Waylon Wong]

Oh, exactly right, Darian. Except, you know, Erica puts it in ounces, of course.

[Erika Groschen]

This is an 8 ounce vessel containing 4 ounces of liquid.

[Waylon Wong]

So congrats, Darian, you are qualified to write the monthly jobs report. You know, the language is boring by design.

[Erika Groschen]

It's fine if the releases are boring. What's not fine is if they have a political or policy slant to them.

[Darian Woods]

Erica shared two big worries with us when it comes to the BLS and the integrity of the jobs data. The first one is manipulation. Basically, who gets access to the information and what they might do with it.

[Waylon Wong]

Erica says meddling could show up in different ways. For example, someone in the government could change the public release schedule either to bury bad news or announce good news at an opportunistic time.

[Darian Woods]

If this happened, it would be a massive change in how the BLS currently operates. The agency publishes a schedule of its data releases well in advance. Everyone gets the numbers at the same time. And this is important because the jobs report moves.

[Waylon Wong]

The stock market hiccups in this process, even if they're not the result of malfeasance, make headlines. Like last year, a BLS data release didn't happen as scheduled. People from a couple investment banks then reportedly called the agency and got someone to tell them the numbers. This had other other people in the market crying foul that some people got the information early and could potentially trade on it. The BLS said at the time that it was reviewing its procedures to make sure it wouldn't happen again.

[Darian Woods]

Erica also flags another potential kind of manipulation, and that is changing how the BLS calculates the jobs numbers.

[Erika Groschen]

I worry about hubris that some person who feels they're very smart may feel, gee, the BLS shouldn't be doing it that way. They may have all their explanations for why they do it that way. But I'm smart, and I think it should be done this way.

[Waylon Wong]

Oh, like I have a better formula for calculating the unemployment rate or something.

[Erika Groschen]

Exactly right.

[Darian Woods]

Well, we've seen how the Commerce Secretary has his own idea about how to calculate gdp. He wants to take government spending out of the equation.

[Waylon Wong]

Yeah, and we'll have an episode on that next week. So between changing the release schedule or the equations, manipulation is one of Erica's big worries about the bls. Her second major concern is resources. According to one estimate, the Bureau's budget has shrunk over 10% since 2009 when adjusted for inflation.

[Darian Woods]

And it takes a lot of resources, both money and people, to conduct the surveys that feed into the jobs report. And I've got to think that BLS staffers are taking note of the big cuts to federal workers.

[Waylon Wong]

Yeah, fewer people makes the job of collecting and analyzing survey data harder. And response rates for the surveys have already been declining. That's a problem because smaller sample sizes could lead to lower quality data with more errors.

[Darian Woods]

Data quality is also about what gets measured. Elise Gould is a labor economist at the Economic Policy Institute. It's a think tank that advocates for low and middle income working families. It's also part of a lawsuit seeking to bar Doge from accessing systems. At the Department of Labor, which oversees.

[Waylon Wong]

The bls, Elise recently went to look up government data on poverty levels by race and the information was gone. It later came back, but Elise says that if the administration decides it no longer wants to track, say, unemployment rates by gender or race, that would be a blow to her work.

[Angel Carreras]

What I look for in the labor market is how is it affecting workers and their families, and you want to know how that affects not just the average, but different groups of people. Race and ethnicity and gender are very key indicators to know how people are doing in the economy. And we think having that complete picture is very important to have evidence based policymaking.

[Waylon Wong]

Both Erica and Elise say that they have faith in the staffers at the bls, this group of dedicated data nerds who would raise the alarm about interference. Erica says vigilance is part of BLS agency culture and the norms that underpin its work. Still, those norms are vulnerable.

[Erika Groschen]

They can be undermined. It's like what parents tell their kids. Trust takes a long time to build up and it can be ruined in an instant.

[Waylon Wong]

This episode was produced by Angel Carreras and engineered by Gilly Moon. It was fact checked by Tyler Jones. Cake and Cannon is our show's editor and the indicator is a production of npr.

[Gilly Moon]

This message comes from Pemco Mutual Insurance Company. Their mission is to help customers worry less and live more. So they're sharing prevention tips that empower you to prevent some of life's pitfalls before they happen.

[Michael Hosmar]

Visit pemco.com prevention this message comes from Capella University. With Capella's Flexpath learning format, you can set your own deadlines and learn on your schedule. A different future is closer than you think with Capella University. Learn more at Capella. Eduardo.