Trump’s justified removal of BLS Commissioner McEntarfer

Op-ed views and opinions expressed are solely those of the author.

Recently, President Trump made the bold decision to fire Bureau of Labor Statistics (BLS) Commissioner Erika McEntarfer—an action that was not only warranted but essential for the integrity of our economic data.

The BLS serves as the principal fact-finding agency for labor economics and statistics, and the accuracy of the information it provides is crucial. Without reliable data, economists, public policy analysts, and elected officials are left to navigate complex economic landscapes blindfolded.

While it is understood that no data can be flawlessly precise 100% of the time, the expectation is that it remains reasonably accurate most of the time. BLS employs numerous highly trained economists who utilize statistically significant samples to arrive at key figures like monthly job creation numbers.

For these estimates, the agency employs sophisticated methods, drawing from multiple samples to ensure a comprehensive picture of the labor market. When executed correctly, the reported value should be close to the actual figure.

Such parameters are not mere guidelines; they are vital to the functioning of our economic system. The monthly jobs report has a significant influence on government policy, particularly by shaping the Federal Reserve’s monetary policy.

While data from the last 20 years shows that revisions in the 50,000 range for monthly data are not uncommon, two consecutive monthly revisions of more than 125,000 are unheard of.

Had the recent revisions to job data been available during earlier releases, we may have seen interest rates slashed by 25 to 50 basis points. That’s a game-changing difference that would affect borrowing costs for individuals and businesses alike.  It would also lead to more job creation.

McEntarfer, who was ratified by the Senate in January 2024, had a rocky tenure. Her August 2024 release of a report indicating the BLS had overstated the number of jobs created from March 2023 to March 2024 by more than 800,000 is nothing short of alarming. The enormity of such an error does not simply require acknowledgment; it demands immediate corrective action and a commitment to prevent future huge miscalculations.

Just after the August 2024 downward revisions release, the Federal Reserve acted decisively to cut interest rates in September, November, and December, despite inflation falling short of its 2% target.

The Fed understands that incorrect data has compromised its monetary policy decisions. Regrettably, less than a year later, we found ourselves in a similar predicament.

The Federal Reserve has two critical objectives: maintaining stable prices and ensuring a growing economy that generates sufficient new jobs the keep the unemployment rate low. When the BLS reported robust job creation numbers of 139,000 in May and 147,000 in June, the Fed held off on interest rate cuts, believing job growth was a sign of economic resilience.

However, a recent revision downgraded the data for May from 144,000 to a mere 19,000—an extraordinary 87% reduction. The June figures also fell dramatically from 147,000 to just 14,000. Had the Fed known these true numbers during their last Federal Open Market Committee meeting, the outcome would have likely been a significant interest rate reduction.

An 87% downward revision in job creation figures is almost statistically impossible when utilizing sound sampling techniques. This glaring incompetence raises serious concerns about McEntarfer’s ability to fulfill her responsibilities. Given that she had already been warned about data accuracy, her performance was especially egregious.

Trump’s background as a business leader informs his approach to leadership: when an organization isn’t performing, it’s essential to make changes at the top. In business, as in government, accountability matters.

The President needs to appoint a new Commissioner who understands the importance of accurately producing labor data from statistically sound samples, and who can restore confidence in the information provided by the BLS.

Removing McEntarfer was a step in the right direction. We need someone in that position who will prioritize accuracy and reliability—qualities that are non-negotiable when it comes to data that shapes our nation’s economic policy.

In a time when clarity and precision are paramount for effective governance, we must strive for excellence in every dimension of economic reporting. President Trump’s decision to terminate McEntarfer will prove beneficial as we move forward in ensuring robust and reliable economic indicators.

This firing has nothing to do with the low number of jobs reported for June. It has everything to do with accuracy.

Dr. Michael Busler, Ph.D. is a public policy analyst and a Professor of Finance at Stockton University where he teaches undergraduate and graduate courses in Finance and Economics.

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