BENGALURU, July 25 (Reuters) – Quality concerns regarding official U.S. economic data – traditionally considered the global benchmark – have been expressed by 89 out of 100 leading policy experts surveyed by Reuters, with most indicating authorities aren’t addressing these issues with sufficient urgency.
Declining survey participation rates and significant staff reductions at statistical agencies threaten the reliability of data crucial for decision-making by policymakers, businesses, and households.
The U.S. Bureau of Labor Statistics (BLS), the primary agency for labor market and inflation data, has experienced workforce reductions through firings, resignations, early retirements, and hiring freezes as part of White House cost-cutting measures.
Federal Reserve Chair Jerome Powell, who has maintained steady interest rates while monitoring potential inflationary impacts from President Donald Trump’s tariffs, recently warned that budget cuts could compromise key economic surveys.
In a July 11-24 Reuters poll, 89 of 100 economists expressed concerns about official U.S. economic data quality, including 41 who indicated being “very concerned”.
Survey participants, including Nobel Laureates, former policymakers, academics from leading U.S. universities, and economists from major banks, consultancies, and think tanks, primarily focused on future data releases.
Former BLS commissioner Erica Groshen (2013-2017) expressed concerns about potential missed deadlines and undetected biases emerging in reports due to staff reductions.
She also highlighted risks associated with current administration changes potentially transforming civil service employees into political appointees, noting the lack of congressional champions actively supporting federal statistics agencies.
Since Trump’s inauguration in January, the federal civilian workforce has decreased by approximately 260,000 employees by April’s end according to Reuters calculations.
BLS staffing levels have declined by at least 15%, resulting in the agency discontinuing calculation and publication of about 350 components of the Producer Price Index, an inflation indicator before goods reach consumers.
A BLS spokesperson acknowledged declining federal survey response rates over recent years and stated the agency is exploring solutions to overcome response rate and resource challenges through outreach efforts and alternative approaches.
Sources indicate similar budget and staff reductions have affected other agencies including the Bureau of Economic Analysis and the Census Bureau.
When asked if U.S. authorities were addressing economic data accuracy concerns with sufficient urgency, over 80% of respondents (71 of 87) answered negatively.
Approximately 70% (63 of 90) also indicated U.S. government agencies lacked sufficient resources to maintain high-quality economic data collection and dissemination.
Former Bank of America global economic research head Ethan Harris explained that budget cuts occur when survey operations become increasingly challenging, requiring more extensive sampling and follow-up efforts.
He noted statistical agencies often get overlooked in budget decisions due to lacking powerful lobbying groups for protection, predicting no improvement in this situation.
More than two-thirds of surveyed experts (66 of 98) expressed concerns that deteriorating statistics could negatively impact Federal Reserve policymaking.
A similar proportion of economists in a separate recent Reuters survey shared concerns about the Fed’s independence amid Trump’s public criticisms of Chair Powell.
Harvard University professor and former U.S. Treasury assistant secretary Karen Dynan stated that major statistical agency budgets no longer adequately support maintaining high-quality statistics production.
She emphasized policymakers aren’t prioritizing these issues sufficiently to preserve America’s status as having the world’s best statistical system.
Recent Reuters surveys also revealed concerns about economic data quality in Britain and unemployment statistics accuracy in India.
Additional reporting by Anant Chandak. Polling by Jaiganesh Mahesh, Renusri K and Aman Kumar Soni. Editing by Ross Finley and Mark Potter
— News Original —
US economic data quality a worry, authorities not acting urgently enough, experts say- Reuters poll
BENGALURU, July 25 (Reuters) – Risks to the quality of official U.S. economic data – long seen as the gold standard – are worrying 89 of 100 top policy experts polled by Reuters, with most also concerned that the authorities are not addressing the issue urgently enough.
A decline in official survey participation rates and recent deep staff cuts at statistical agencies risk undermining the reliability of data that policymakers, companies and even households rely on to make decisions.
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The U.S. Bureau of Labor Statistics, the principal agency for labor market and inflation data has, like other government departments, been hit by firings, resignations, early retirement and hiring freezes as part of a White House cost-cutting push.
Federal Reserve Chair Jerome Powell, who has held interest rates steady all year while keeping a close eye on whether President Donald Trump ‘s tariffs have added to already-elevated price pressures, last month warned cutbacks could degrade key economic surveys.
Most economists in a July 11-24 Reuters poll, 89 of 100, said they were concerned about the quality of official U.S. economic data, including 41 who said they were “very concerned”.
Survey respondents, who included Nobel Laureates, former policymakers, academics from top U.S. universities, and economists from major banks, consultancies and think tanks, were mainly worried about future data releases.
“I can ‘t help but worry some deadlines are going to be missed and undetected biases or other errors are going to start creeping into some of these reports just because of the reduction in staff,” Erica Groshen, BLS commissioner from 2013-2017, told Reuters.
“Another very big risk is all of the current administration’s changes will make civil service employees more like political appointees …. I can ‘t name any senator or congressperson who is a champion for federal statistics and has made supporting these agencies an important part of their agenda going forward.”
When Trump took office in January, the federal civilian workforce was 2.3 million. It was nearly 260,000 civil servants lighter by end-April, according to a Reuters tally.
Estimates show BLS headcount is down at least 15%. Partly as a result, the agency is ending the calculation and publication from next month of about 350 components of the Producer Price Index, an indicator of inflation before goods reach the consumer.
A BLS spokesperson said in a statement: “Response rates to most federal surveys have been declining for many years …. In addition to outreach efforts focused on encouraging households and businesses to participate in our surveys, BLS is exploring ways to overcome response rate and limited resource challenges.”
Other agencies, including the Bureau of Economic Analysis and the Census Bureau have had recent cutbacks to budgets and staff, said some sources familiar with the matter.
Asked if U.S. authorities were treating the issue of economic data accuracy with sufficient urgency, more than 80% of respondents, 71 of 87, said “no”.
Some 70%, 63 of 90, also said U.S. government agencies did not have enough resources to maintain the collection and release of high-quality economic data.
“Budget cuts are coming at a time when it ‘s getting harder and harder to run surveys. You have to sample more people and chase people down, and that ‘s a labor-intensive effort,” said Ethan Harris, former head of global economic research at Bank of America.
“People take statistical agencies for granted. So they ‘re easy to cut because there’s no lobby or special interest group that ‘s powerful enough to protect them. I don ‘t see any improvement going forward.”
More than two-thirds of those polled, 66 of 98, also said they were worried that deteriorating statistics would hurt Fed policymaking.
A similar proportion of economists in a separate recent Reuters survey published this week said they were also concerned about the Fed ‘s independence from political influence amid Trump ‘s public attacks on Fed chief Powell.
“Major statistical agency … budgets are not adequate to support ongoing production of the wide range of high-quality statistics they have traditionally released,” said Karen Dynan, professor at Harvard University and former U.S. assistant secretary of the Treasury for economic policy.
“Policymakers are not prioritizing the issue enough to ensure the U.S. maintains its status as having the best statistical system in the world.”
Reuters surveys published this month also showed concerns about the quality of economic data published in Britain and the accuracy of unemployment statistics in India.
Additional reporting by Anant Chandak. Polling by Jaiganesh Mahesh, Renusri K and Aman Kumar Soni. Editing by Ross Finley and Mark Potter