By David Enna, Tipswatch.com
President Trump just posted this on his TruthSocial site:
Obviously, the president did not like the July jobs number, which came in at 73,000 added, less than the expected 100,000. But he was more angered by a revision — amounting to much lower jobs numbers for May and June, potentially caused by uncertainty in the aftermath of “Liberation Day” tariffs.
What’s interesting is that the lower-than-expected jobs numbers strongly support the president’s call for lower interest rates, as reflected in this Wall Street Journal headline today: “Cooling Job Market Opens Door to September Cut Despite Inflation Jitters.”
The latest jobs report shows how a series of policy experiments in the early months of the Trump administration could be slowing the economy and labor markets. They include a crackdown on immigration that could reduce the number of people available to work, an increase in tariffs that might dampen demand, and job cuts for federal workers and other contractors and nonprofits that rely on government partnerships. …
The three-month average of private job growth fell to 52,000, down from 158,000 in February and the lowest since last August.
The firing of BLS commissioner Erika McEntarfer is disturbing because it signals that Trump will be unwilling to accept bad news in economic statistics, even if the news is accurate. The BLS — which issues the crucial monthly inflation report — is an independent and non-partisan division of the federal government, staffed almost entirely by economists and statisticians. It is unlikely that McEntarfer made a “call’ to lower these job numbers to embarrass Trump.
The United States financial system is built on reliable and (hopefully) accurate economic statistics. In this case, the BLS back-tracked on earlier, more-positive jobs reports. So … mistakes need to be corrected. A comment on the firing from a Bloomberg article:
“If this holds, and I assume it will, it would be a very big deal. We would not be able to have great confidence in the integrity of the data going forward,” said Julia Coronado, founder of the research firm MacroPolicy Perspectives LLC. “This data is a public service of enormous value, and its integrity is essential.”
And I had to laugh at Sen. Elizabeth Warren’s reaction, posted on X.com. (Warren agrees with Trump, by the way, that interest rates should be lowered):
Instead of helping people get good jobs, Donald Trump just fired the statistician who reported bad jobs data that the wanna-be king doesn’t like.
The inflation picture
Just about weekly, I get comments or feedback from readers worried that U.S. inflation numbers will be doctored to put a positive light on the Trump administration and its policies. My feeling has always been, “I need to see evidence.” Inflation in the June report came in higher than expected, which was a good sign the data are not being manipulated.
Back on June 5, I wrote about how the BLS was expanding its use of “estimation” in calculating the Consumer Price Index, because of DOGE-required job cuts. My conclusion then:
So, without any evidence to the contrary, I will accept that the U.S. inflation numbers will continue to be “relatively accurate,” which is about as good as they ever were. But we have to accept that budget and staffing cuts at the BLS are going to lead to less accuracy, not more accuracy.
Apparently, the jobs report is subject to a lot of revisions, partially caused by low response rates to BLS surveys. But as months pass, the BLS economists can get a clearer idea of labor reductions, or increases, so revisions are needed.
Today’s firing of the BLS commissioner is troubling. McEntarfer could have been replaced quietly at any time in last last six months. But instead the president choose the one day he got bad news. That obviously will harm morale at the BLS, and potentially send very bad message: “Good news or else.”
As I have said before, my advice is to “be wary.”
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Treasury Inflation-Protected Securities 
The author’s vast knowledge really shines through.
Here’s an episode of the Odd Lots podcast featuring an interview with former Trump-era BLS Commissioner Bill Beach, where he discusses the recent firing and explains why the employment numbers can sometimes vary so significantly.
https://open.spotify.com/episode/0EAgzj7mV1zpcXZAYR5zH1?si=4Hi-5jf7QiGOkLMN_mt90Q
Nathan Tankus did a clean-up of the written transcript. (Some of us prefer to read!)
It’s a good episode.
https://www.crisesnotes.com/bloomberg-odd-lots-podcast-transcript-an-interview-with-former-bls-commissioner-bill-beach/
tling,
Thanks for posting this! That interview was very helpful.
I thought I was here to learn about TIPS, not TDS?
For those curious, TDS = Trump Derangement Syndrome. I get your point. However, the BLS produces the inflation numbers that determine your return on a TIPS. This is an extremely important topic for holders of TIPS.
And I-bond holders and Social Security recipients…
Is TDS something that Trump voters suffer from? I mean this whole firing thing is a perfect example of Trump being deranged.
Ryan McMaken of the Mises Institute asks the following good questions.
“Why are we still expected to take initial BLS job estimates seriously when they are often reduced by 75 percent or more upon later revisions?”
“What use is the Fed’s supposed devotion to being “data-driven” when the data itself is unreliable, and the Fed is basing its policies on data that turns out to be thoroughly wrong? The answer is: we can’t. The spectacle of the FOMC making policy based on wildly inaccurate employment numbers simply illustrates the absurdity of claims by Fed officials that the central bank can centrally plan the economy by divining the “correct” monetary policy based on government data.”
The Ludwig von Mises Institute for Austrian Economics, or Mises Institute, is a nonprofit think tank headquartered in Auburn, Alabama, that is a center for Austrian economic thought, right-wing libertarian thought, and the paleolibertarian and anarcho-capitalist movements in the United States. Enough said.
Bob, I think this is legitimate criticism. What isn’t legitimate is when Trump and other Republicans accuse the BLS of “faking” job numbers for political reasons. These BLS people are compulsive-obsessive about trying to be accurate. I recently had a long talk with a former BLS official who predicted there would be accuracy problems: 1) BLS budgets have lagged inflation for a decade, and 2) more recently, DOGE efforts eliminated 15% of the workforce. He also said, “There is only one politically-appointed person at the BLS.” (She just got fired.) So, repairs are needed. What isn’t needed is political accusations or a political takeover of the BLS.
What is important here is that a variety of gov’t statistics are subject to revisions, and some of them get revised a lot.
I would love to see a data collection project where each of these time series is tracked with all changes, and the standard deviation of the changes for the time series. This would give a fair, unbiased reference for interpreting the accuracy of recent announcements.
You could look at this firing from another point of view:
Revisions were true and accurate, but original estimates are so wildly inaccurate as to be completely worthless for any purposes. Why are they even being published if the they are 10X (1000%) wrong from true numbers? Does a person who keeps producing these “estimates” month after month deserve to keep their job?
it’s due to poor response rates for initial estimate after COVID. Before COVID it was 60%, now 43%, per Elaine Chow, for Labor Secretary under Trump.
in addition there have continuing budget cuts to BLS, and Trump h proposed another 8% cuts for next fiscal year.
Yes, you could criticize the process and even fire the commissioner. But Trump claimed the BLS “rigged” the numbers to hurt him and Republicans politically. That was the message he wanted sent.
Former BLS commissioners (bipartisan) criticize Trump’s firing of Erika McEntarfer, urge reinstatement, affirm need for objective reliable government statistics:
https://www.theguardian.com/business/2025/aug/04/trump-firing-labor-statistics-chief-reactions
I have a fairly sizable emergency fund that is largely in I Bonds, built up over a number of years. Now we find ourselves in a situation where, on the one hand, new tariffs and other ill-considered policies are likely to drive up inflation, but on the other hand, it seems likely that there will be unprecedented political pressure on the BLS to cook the inflation data. A bit of a conundrum. For now I guess I will hold tight and see what happens, and keep checking here and the news for indications that inflation calculations are being doctored. Always appreciate the reporting and analysis on this website.
And your alternatives are? What’s your exit strategy? Goals? Nothing….?
The main alternative for emergency savings without needing to worry about loss of (nominal) principal is to have some of the money in high-yield savings accounts or money market accounts, and some of it in laddered CDs. CDs are typically less flexible than I Bonds that have been held for more than a year, but the emergency fund is intended to cover the potential loss of income over a medium term period as well as possible emergency expenses where money is needed in a hurry. If I decide to exit I Bonds I would probably just redeem everything. A bit of a tax hit, but it’s not like there is enough income there to push me into a higher bracket. At the moment I could do better interest rate wise with banks, but I like the hedge against inflation—so if that starts to look illusory, I’m left with just the exemption from state income tax and the tax deferral.
George, I feel comfortable holding I Bonds as my second-tier emergency fund. I think the inflation numbers will continue to reflect reality, at least “somewhat,” and I don’t want to redeem and pay tax until I need the money.
There is a lot of ‘the sky is falling’ kind of advice on this site in the comments section lately. Before it was ‘sell all your stocks!’ Now we see where that led. Now it is cash in all your I Bonds! I think the comments of late should largely be ignored.
The new nominee will be some Fox Business News anchor, total sycophant, Larry Kudlow, Maria B, maybe someone with no knowledge of statistics at all, who will be tasked with releasing glorious reports at all times. They will be confirmed narrowly along party lines. CPI stats will diverge completely from reality, and anyone who talks of it will be blacklisted and fired or their employer punished into firing them. TIP and i-bond payouts and all COLAs will be paid based on these opinion statistics. There will never be CPI over 3% again, nor UE rates that are troublesome no matter what is really happening. When longer term rates go up, they will be suppressed through new rounds of QE. USD will continue to drop, $1.03 per Euro in January has become $1.18 today.
Len, you are presenting the nightmare scenario. This is a job for a very experienced economist/statistician/manager. You would see a huge wave of resignations at BLS if there is an aggressive attempt to lie about inflation or jobs. I am hoping William Wiatrowski, the acting commissioner and a long-time BLS stalwart, will get the job. He was acting commissioner in Trump’s first term from from January 2017 to March 2019.
While one of the Mr T impeachments was a failure to enforce the Bills appropriated into law, ie. aid for Ukraine, one could say that a vote entirely by one Party is a political decision, it is also the reason we have a Congress AND the absence of leadership by the party not supporting Bills that were passed into law. Now we have the same factual scenario, except Congress should divorce itself of its responsibility (go home) or enforce the laws of the land!
The July CPI numbers coming out next week will be valid and when coupled with the recent employment numbers (remember it’s both) will lead to NO change in rates!
The firing of the BLS Commissioner for no reason will mark a seminal moment in our economy and markets. World markets and investors will question whether our data is being manipulate for political purposes.
There was no reason for the firing other than Trump not liking the numbers. The BLS Commissioner had no input into the monthly employment data. It’s a matter of response rate by participating employers in a survey that has many economic factors to it. BLS has created a model over many years of study and testing. Covid also likely also has played a part in the larger swings in the revisions.
Trump’s minions trying to back up the reasoning for the firing is also a joke. They don’t seem to understand how the employment data are collected and interpreted. If they did, they could have explained to the president that his tariffs are creating uncertainty for business who now are not hiring as many workers as in the past. Plus you can throw in AI as starting to limit job creation.
I hope I’m wrong, but I see the U.S. as being the gold standard for data collection going away. And foreign governments will have to decide if they can trust that the U.S. will be there as a stable economic force.
Brent FineFormer BLS worker at the state of Arizona
Brent, painful truth. This event could snowball into something truly ugly. Trump needs to leave a career BLS person in charge.
This firing of the BLS head by President Trump’s reflects his belief in the Unitary Executive Theory—a view that the President has sweeping authority over the executive branch. With recent Supreme Court decisions affirming this principle, such moves may become more common, though not less controversial.
The justification—that the BLS data may be unreliable or politically biased—mirrors actions by leaders throughout history who distrusted or sought to control information. From Roman emperors like Domitian, who executed scribes for unfavorable census records, to Louis XIV’s surveillance state, powerful rulers have long tried to bend data to their will.
In modern democracies, the temptation persists. Argentina infamously manipulated inflation data in the 2000s. Hungary has been accused of reshaping statistical agencies to serve partisan narratives.
Even in the U.S., debates over the independence of agencies like the EPA, CBO or CDC show how fragile data integrity can become. Years of research disappears due to the whims of an executive.
If anything, it’s a telling example that elections have consequences.
Yet one truth remains: markets are not so easily swayed. The bond market, in particular, watches for inconsistencies, revisions, and credibility gaps. Leaders may fire statisticians, but they can’t fire the collective judgment of millions of investors. Like emperors before them, the US President may find that power over people does not equate to power over perception.
I agree. I am getting exhausted with all the overwhelmiing volume and speed of unconventional, untested policies without any due dilligence, a lot of this is in the name of disrupting the status quo. Toying with $20+ Trillion economy like this for another 3.5 years scares me a lot. However, I have been getting comfort thinking what Mark stated so eloquently that the markets have and will provide the ultimate guardrails. Unfortunatly, irraprable or long-term damage is happening now. It’s going to be hard for us to escape some damage directly or indirectly.
The USA is not the only government to fiddle with statistics. If this government’s statistics are not trustworthy, it will be reflected in the market. Secretary Bessent plans to ramp up short term T-Bills and increase TIPS offerings to finance the new debt. So far demand has been fine. The reopening for the most recent TIPS is in September. Will the firing of Dr. McEntarfar be a costly mistake or will this bring more accurate data to the process?
I have an article posting Monday morning about the Treasury’s current auction plans, which call for increases in the size of 5- and 10-year TIPS auctions, along with a greater focus on T-bills. There is no way to predict the BLS accuracy, but nothing will be changing in the short term, except for morale.
Correct me if I’am wrong, but it appears that employment data is not based on actual data, but on survey’s so it is much more of an estimate. Inflation statistics, however should be more accurate, it is based on actual prices that are sampled from various parts of the country. It is a statistical sample, so its not completely accurate, but should be reasonably close.
Some inflation data also relies on surveys, such as the mysterious “owner equivalent rent” part of the housing index. But I agree inflation should be able to be reported relatively accurately, backed up by plenty of private economists looking for inaccuracies.
I could not find the quoted Bloomberg comment anywhere in the linked Bloomberg article.
That was a breaking-news compilation article when I grabbed the link. Her quote was later shifted over to this evening briefing: https://www.bloomberg.com/news/newsletters/2025-08-01/trade-war-turmoil-rising-unemployment-send-markets-diving-evening-briefing
The news reports these unprecedented decisions and we try to make rational sense of them as if they are the actions of a normal human being doing his job in a rational fashion. None of this is normal. You don’t fire people for doing their jobs. You don’t avoid taking responsibility for your actions by shooting the messenger for reporting what is happening. You don’t pass the buck to the Fed chairman for not lowering interest rates when he would have done so months ago if it were not for the insane tariff policy threatening to reignite inflation. You don’t pretend foreign countries pay US tariffs on imports when it is really the American importer who pays them and then passes them along, in part of whole, to the American consumer in the form of a regressive consumption tax. I’m tired of the reality distortion field, the propaganda that has been put in place to protect the image and ego of one man. The truth is that the tax cut many of us will get will be offset and negated by the tariff tax on a plethora of goods and services. The truth is we have the beginning signs of stagflation, when growth slows (despite the recent quarter), year over year, employment decreases, and inflation increases at the same time. It’s not too late to prevent it, but you can’t solve a problem if you don’t first acknowledge the problem. What does all this mean for our investments? More uncertainty. Just don’t treat it like it is normal.
Very good comment that sums things up.
Lost in this discussion is the fact that Social Security recipients are likely to see lower CPI-W based COLAs going forward in the face of robust and very real healthcare costs.
Ok, I guess I need and education. If you are counting jobs, how can a revision force the count down? I can see late arriving data driving the count UP but not down.
Sound like there might be some estimation/extrapolation going on.
Yes, the BLS has noted it is getting poorer response rates from its employer surveys, so some (or a lot) of estimation is being done. When estimating, in the lack of other strong evidence, you tend to go with the “status quo,” meaning numbers that match the current trend. Better information comes in later and you realize you were wrong and revisions need to be made. The jobs reporting system needs repairs.
The employment report is based on survey data and is therefore an estimation. Response rates to survey questionnaires dropped significantly post-pandemic. The smaller the sample size, the larger the error term. But just because the error term is larger, doesn’t mean the estimate is based. The “estimate” is about to get biased
Nonfarm payroll employment survey is voluntary. It’s not a 100 or event 90 percent survey of all nonfarm employment. If businesses don’t report, BLS must use historical data (usually going back 10 years) to come up with an estimate. Every year the survey is benchmarked to unemployment insurance data (which captures about 95% of all nonfarm workers) which usually lags by about 9 month. It’s not just the percentage of employers who are participating in the survey, but the employment totals they are reporting, that can make the numbers go down. There is a cost to businesses that supply the data. They have to donate time and effort for someone to collect their wage, hours and employment numbers. If a business is cutting back on administrative personnel it may decide to drop out of the survey. This is why it is important for BLS to reach out to businesses to explain why they need their help. It is used by local and national economists and business leaders to provide to business, government and individuals who can use the data in making forecasts about local and state economies. When I worked for BLS at state level we had people who reached out to those businesses to ask them to participate. However, because of funding cuts BLS took back that state function and I believe is not making the personal contacts that we made to keep those employers in the survey. That makes the survey less accurate and revisions larger. The monthly data was always revised for two months, but those errors are getting larger probably because of fewer participants in the survey. Brent FineChandler, AZ
I’m wondering why the asking-employers-to-report-headcount survey is not supplemented with interim payroll tax return data. That wouldn’t give as immediate a signal, since employers report quarterly, and only W-2 employees would be counted (self-employment income is only reported annually). And you’d still have to estimate compliance rates. But it still seems like it would provide more data to the model.
Excerpt from economist Paul Krugman, writing today at https://paulkrugman.substack.com/p/caracas-on-the-potomac
“The BLS isn’t always right, nor should you expect it to be. It’s trying to track a complex economy, and sometimes it revises its past estimates — as it did this morning. But it is extremely professional, rigorously nonpartisan, and everyone in the business considers it the gold standard for economic data.
Or maybe I should say ‘it was‘ rather than ‘it is‘. . . . [Trump] just fired the head of the BLS because he didn’t like the numbers it reported — a clear signal to the remaining staff not to report bad news.
And just like that, we can no longer treat BLS data as the gold standard. . . . From here on, I’m going to be paying a lot more attention to private surveys. And when they tell a different story from the official numbers, there will no longer be a reason to take the official data more seriously.”
Paul Krugman’s Mistakes
Paul Krugman has been criticized for several incorrect predictions and positions over the years, though the frequency and nature of these errors are subject to debate:
While some sources characterize Krugman as frequently wrong—such as The Spectator World, which claims he has a history of being “wrong about absolutely everything” —others note that he has also revised his views and acknowledged errors, such as his inflation forecast. Economic forecasting involves uncertainty, and disagreements often reflect differing theoretical perspectives rather than outright inaccuracies.AI-generated answer. Please verify critical facts.
Which has exactly what to do with the Krugman excerpt I quoted above, concerning the traditional objectivity of BLS statistics, now endangered?
Find me an economist who has never been wrong, and I’ll eat this computer screen. Krugman’s work was recognized with Nobel. I’m lucky if I can even get to “No.” 🙂
‘Today’s firing of the Bureau of Labor Statistics commissioner is troubling…’
It certainly appears troubling to me as a mere plebeian.
BLS has been broken for some time. You can read in your own motives “obviously” to the firing, but the problem has been there for a while. Just read the headlines about the statistics coming out of the BLS from 2024 into 2025. And it goes back further too.
Here is one from the WAPO:
washingtonpost.com/business/2024/08/28/technical-error-bls-jobs-delay/
There is too much play in the survey numbers, and so you fill in with guess work until you can make adjustments. And into those swings mischief can step into the guess work. Will the bias swing the other way? Let’s hope not! But I’m not sure a new director will be able to overcome the problems with the surveys. Times have changed and the laws for reporting haven’t kept up.
The hollowing out of the civil service continues. Eventually we’ll have nobody left but inexperienced and incompetent political hacks running the day to day activities of the federal government. Sad.
Trump’s playbook is to appoint someone that is unqualified for the job, that way they know their loyalty is the only reason they got the job, and then they are 100% beholden to Trump. They know what is expected of them and they will deliver.
It is interesting that in August 2024 (one year ago, and two months before Trump was elected) the BLS substantially revised jobs numbers downward for June 2024 (down 61,000) and July 2024 (down 25,000). The unemployment rate was 4.2%, same as today. These revisions are common.
There were downward quarterly revisions going into 2025. Chicanery? Don’t know. Far from obvious. It just needs to be fixed. And firing a director who made things worse instead of better over her term might not be the fix. I think the survey itself needs to be looked at. What are the motivations to do it right from the employer’s end? Instead of the government’s end.
Finding a conspiracy in everything is how disreputable people try to make facts vanish. Appointing a political hack gives me much less confidence in future BLS numbers, and is much more concerning to me than whether the current methodology relies on estimates -which of course it does. BLS numbers could be improved with enhanced data collection – which includes hiring more government employees – the opposite of what has occurred.
“BLS Has been broken for some time.”
You could only consider it “broken” if you are holding it to some standard that private industry could never match.
My worst fears as an I-bond and TIPS investor are about to be realized. Manipulated inflation data is on the way.
When i ask reps at Schwab for the YTM at time of TIPS purchase, they ask me why i care. I’m flabbergasted by the question ‘cuz it’s none of their business, but the emerging antics of Trump et al. are an example of why i care. I have meticulous notes of YTM at time of purchase for all my TIPS (all held in Roth IRAs). So i can sell any that i want to knowing i’ve made a profit as long as current YTM is lower than purchase YTM. (Again, i’m only selling my TIPS that mature in the next 4 years, then i’m gonna stop watching the news.)
Tahoe, if the Schwab people can’t tell you the real yield to maturity, and don’t think you should care, I’d say: 1) I need to talk to your supervisor, or 2) Answer me or I move my account. That is ridiculous.
The Schwab confirmation emails used to give the YTM at time of purchase, then stopped doing it. My last TIPS purchase confirmation that gave the YTM was 1/15/25. My next purchase on 4/16/25 gave the coupon rate instead, which has no added value since that is in the title of the TIPS.
When I called, they could look up the YTM at purchase, but did not seem to understand why the YTM at purchase is more useful. Whoever made that change is not the brightest bulb.
Maybe if enough people keep calling to get the YTM at purchase, the coin will drop.
I would be leaving Schwab for a different brokerage if this is the best they can do.
David, thanks for your excellent blog. It gave me the courage to set up a TIPS ladder.
For those of us that don’t use PayPal or Venmo, how can we contribute?
Turn off your ad blocker? I do earn “Costco-bill” size earnings every month from ads. That also helps. I picked PayPal and Venmo because I thought those were the most widely used payment apps.
“Kill the messenger” has always been Trump’s response to bad news so we should not be surprised by this move.
The proper response when a debt issuer’s basic data becomes unreliable is to lower the credit rating of that issuer. Do the big credit rating agencies have the courage to do that?
“Be wary”. It’s always good advice but the folks who visit this website are already pretty wary, after all, the products discussed here have always been regarded as among the safest financial products on the planet. That we have to question the integrity of the data underpinning them shows how far down the rabbit hole we have gone.
I’ve been writing Tipswatch for 14 years (good lord!) and I while I have doubted some inflation numbers here and there, those were minor issues and never a hint of manipulation. The BLS is a complex organization full of people who actually care about accuracy. Pressure could be placed, for sure. And then what? An explosion, I suspect.
If this administration cooks the books on inflation — at this point it should be expected — can it be corrected and values adjusted when a new administration takes office?
Yes, of course. And i’ll add that i’m not trying to raise alarm by my post below. The risk is not huge. But everyone has to make their own decisions about risk tolerance and lifestyle choices. I’ve just decided that i’ll sleep better at night if i’m not holding TIPS maturing in the next 4 years… in other words, any shenanigans by Trump loyalists won’t be affecting my immediately maturing holdings.
Even if the numbers can be fixed a few years down the line, there’s harm to the bond buyer in deliberately understating the numbers.
If inflation is claimed to run at 2.0% over the next 4 years, and 5 years from now it gets corrected later to 4.0% for that 4 years (suddenly jumps another 8.0% or so), the Treasury is not going to go back 4 years on a 5 year TIPS and adjust the amount of interest you should have received on inflation-adjusted balances in the first 4 years.
And any TIPS that’s already cashed out is out of luck.
And there’s a certain segment of the population that’s going to pay $20 for a dozen eggs, $35 per pound for ground beef and still believe the Trump Administration if they’re told inflation has been defeated.
I stand corrected; you’re right on all counts Buttery.
For me it comes down to this: I remember first day of Microecon1A at University of Calif (45 years ago!) prof said “Capitalism is like democracy. Each time you spend a dollar you’re casting a vote.”
My hand reflexively shot up in the air and i asked: “If one dollar is one vote, don’t the people with more money get more votes?” Prof despised me after that but his analogy stuck…
After today’s news i’m looking to sell my TIPS maturing over the next four years as my vote of “no confidence” in the current administration.
I’ll sell each such TIPS if/as real yields dip below the purchase YTM (to ensure profit) and roll proceeds into nominal Treasuries or CDs with same/similar maturity date (to keep my ladder true).
And for now i’ll hold my longer dated TIPS (because i still want long-term inflation protection on a sizable portion of my pile) and check in occasionally to see how bad the corruption gets before i make any moves on those.
It probably depends on when the revisions were made. If fairly quickly, I could see TIPS and I Bond holders getting an adjustment, simply because the higher inflation indexes would make up the difference. This has never happened before. Never really a question about it. But I’d agree with buttery that over the long term there would be no restitution. We don’t want this problem.
Ugh. This is bad news, but not unexpected. Nobel Economist Paul Krugman warned months ago that the Trump Administration is likely to attempt to influence official inflation/jobs statistics to the president’s liking, and he specifically warned investors to be wary of buying or holding TIPS under an administration that has little/no respect for the truth.
I have decided to watch for any significant dips in real rates (which increases the value of TIPS holdings) and will consider selling my TIPS that mature in the next 4 years on the secondary market and put the proceeds into short-term nominal Treasuries (i.e., pocket the gains in my soon-to-mature TIPS before Trump’s loyalists are able to cook inflation/deflation accruals).
I have every reason to expect that future administrations will have respect for the truth, and therefore I plan to: 1) hold onto all of my longer maturity dated TIPS (more than 4 years out); and 2) continue building my TIPS ladder by buying new 10-year TIPS at auction (and/or on the secondary market if i don’t like the rates on auction days.)
Most rational people assume that, whatever the specific subject at hand, information is gathered, as reliably and honestly as possible, and policy decisions are then based on the information. That’s what most of us do in the decisions of our personal lives, whether the issue is an investment portfolio, a new washing machine, an insurance policy, etc.
But this administration has shown repeatedly that policy is decided first, and then disagreeable information is massaged, tormented, or made to disappear. Don’t like the jobs report? Fire the head of BLS and install someone more pliable. Overwhelming scientific evidence of human-caused global warming? Make it go away by removing global warming references from federal government websites and terminating climate research grants. . . . And so on.
I’m still trying to figure out if the various flavors of the Consumer Price Index are about to become unreliable, i.e., based on muscularly applied wishful thinking rather than maximum possible factual objectivity, and, if so, what it means for my I Bonds and TIPS. . . . Or whether I Bonds and TIPS, even if they become temporarily unreliable because of Trumpist diddling with facts, should nevertheless continue to be held because they may yet become reliable again–assuming regime change–after the end of the next three-and-a-half years.
Meanwhile, I wish I could stop thinking of this:
“When I use a word,” Humpty Dumpty said in a rather scornful tone, “it means just what I choose it to mean–neither more nor less.”
“The question is,” said Alice, “whether you can make words mean so many different things.”
“The question is,” said Humpty Dumpty, “which is to be master–that’s all.”
👏👏👏
This afternoon President Trump repeated false information that BLS released revised March 2024 to March 2025 nonfarm payroll numbers (showing a downward revision of 800,000 jobs) after the November 2024 election, suggesting BLS withheld that information to help Kamala Harris.
It was not released in November but on Aug. 24, 2024. See link:
https://www.forbes.com/sites/dereksaul/2024/08/21/us-added-818000-fewer-jobs-than-previously-thought-from-march-2023-to-march-2024-government-says/
By putting out false information Trump is doing more to discredit government data than BLS could possibly ever do. The U.S. has been the gold standard for economic data for decades, but by budget cuts and misleading or false information that status can be destroyed.
Covid played a part in the large revisions seen in recent years, Also, budget cuts has hurt BLS’ ability to maintain quality control. Recently it was reported that a loss of experienced data collectors has diminished the quality of consumer price index information, and I suspect fewer employers are participating in the voluntary nonfarm payroll survey because of the time and cost of providing a free service to the government. And the proposed 8% cut to BLS in next year’s budget will only exasperate the problem of providing quality of data.
Citizens need to speak to their representatives that they expect to see proper funding for important government data programs that the public and private sector, along with U.S. investors, depend upon. Otherwise, our markets will suffer when the world will no longer trust U.S. economic data.
We can only hope there are some checks and balance in the system that will limit the damage that one man can do.
Rather than check Trump’s power, the Supreme Court has only broadened his authority.
I worked for 20+ years for BLS at the state level (Arizona). I can guarantee you no one manipulates data and would almost be impossible to do because the programs that collect data are meticulously reviewed by many economists and statisticians each month. Obviously the president doesn’t understand economics and statistics by the policies he has pushed.
There have been cuts to BLS over the last 20 years that have made it more difficult to maintain or improve the data collection programs. For example, when I worked at the state our research and stat analysts were required to provide outreach to employers who provided wage and job numbers to BLS every month. The nonfarm data program was voluntary and it’s important that employers know how valuable their information is at the local and national level.
Due to budget cuts BLS took back the function of data collection from states and I believe that is one reason the nonfarm payroll data has had such large monthly and yearly revisions in the last decade. I called the national office a few years ago to find out if the outreach to local employers has continued. No one was able to answer my question. I suspect that outreach has declined and with other economic pressures businesses have cut back on volunteering the information.
The farther you get away from the benchmarking process (which includes mandatory unemployment insurance employment data that lags by 9 months the monthly data) the less accurate the monthly numbers will be. Therefore when employers responses are late or less employers are participating in the survey, you will get large revisions to the monthly numbers.
Firing the BLS commissioner will not affect the way the data are collected, which is a process that takes years to come up with an accurate model. Now Trump will add to the uncertainty and could lead to fewer qualified economists and statisticians who want to work for BLS.
Brent Fine
Excellent perspective, Brent.
Hello Brent,
Thank you for your post, it is somewhat reassuring. Hopefully economic data collected and published at the state level will continue to be accurate.
Re. “Firing the BLS commissioner will not affect the way the data are collected, which is a process that takes years to come up with an accurate model.” – but will it affect the way data is reported?
Cheers,
Sabine
What other reason would Trump have to fire the head of the BLS if not to be able to influence the data in some way?
Bingo.
An executive who believes in “letting the chips fall where they may, according to the facts,” i.e., who is not living in a fantasy world of wishful thinking and temper tantrums and belief in his own genius, has no reason to fire people who “fail” to tell him what he wants to hear.
Harry Truman famously had a sign on his oval office desk: “The Buck Stops Here.” Trump’s version appears to be “The buck stops here if it makes me look good, but it stops with somebody else if it doesn’t.”
Inflation is surely going up, as everything imported (that’s nearly everything in Walmart) will cost more due to tariffs. If government officials are afraid to report that inflation is up (surely that will incur Trump’s wrath) they will release false numbers.
This is terrible. The BLS also computes the CPI. Any new Trump appointee is likely to be a loyalist. Guess what that means for future jobs and inflation reports. We are becoming a Banana Republic.
Inflation data from the BLS is already being compromised by Trump’s cuts to staffing. If inflation rises as expected from the tariffs, no doubt he’ll do more firings and staff cuts to get the numbers he wants.
“Cuts to Data Collection May Erode Reliability of Economic Statistics
The Bureau of Labor Statistics is reducing or ending the collection of data that is used to calculate the Consumer Price Index.” – NY Times, July 30, 2025
I wrote about this issue in June: https://tipswatch.com/2025/06/05/inflation-data-collection-is-getting-scaled-back-what-does-it-mean/
Good to know! I’ll take a look at that post. Thanks for your overall excellent coverage.
Not enough chatter today about how DOGE cuts/layoffs have ALSO affected data collection and reporting. This news piece was two whole months ago:
DOGE layoffs may have compromised the accuracy of government data | CNN Business