Bill Beach on How Trump Just Politicized US Economic Data

SPEAKER_2 (0:02)

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Tracy Alloway (0:18)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:22)

And I'm Joe Weisenthal.

Tracy Alloway (0:23)

Joe, I kind of missed this on Friday because I was not feeling very well, so I was out sick. But what was Friday morning like when you were sat in front of your Bloomberg terminal?

Joe Weisenthal (0:34)

Well, the jobs report was pretty shocking, obviously. Friday was just a crazy day. I mean, so the jobs report obviously was, it was bad. I mean, the last two months massively revised down all of this evidence of labor market momentum, perhaps, seems to be stalling. The tariff effect, maybe we really are, and it's some sort of tariff-induced slowdown. The only job creation is in health care and social service. Not great.

Tracy Alloway (1:00)

Right. Okay. So I saw the initial jobs report headlines. So we had non-farm payrolls coming in at plus 73,000, which I think was like 30 percent lower than the average expectation. We had the unemployment rate taking up to like 4.3 percent.

Joe Weisenthal (1:15)

4.2.

Tracy Alloway (1:17)

Almost 4.3 percent.

Joe Weisenthal (1:18)

Oh, let me, sorry.

Tracy Alloway (1:20)

I'm rounding up here.

Joe Weisenthal (1:21)

Okay. Okay. Okay.

Tracy Alloway (1:22)

Although maybe I shouldn't do that on a podcast all about labor market statistics. But the big thing that seemed to catch everyone's attention was we also had these massive revisions to the report for May and June. So we had a combined 258,000 jobs basically lowered from the initial reports. This was like the biggest revision since the depths of the pandemic. And then the headline that really caught my eye while I was laying in my sick bed on Friday afternoon was Trump firing the head of the Bureau of Labor Statistics. So the agency responsible for putting out the non-farm payroll report every month.

Joe Weisenthal (2:01)

Yeah. This is, I would say, the key thing is that A, we've been used to seeing significant revisions. We've been talking, you in particular have been writing a lot in the newsletter about deteriorating quality of labor statistics. Response rates to a lot of surveys have gone down over time, kind of like we're seeing in political opinion surveys and so forth. So there's already been this sort of anxiety. You have a lot of people online, including President Trump himself, who have been stoking these conspiracy theories about these revisions, these attempts to actually be transparent. Then you get the first genuinely negative report under this administration. It's the first one that was like, okay, this was bad. And boom, Trump fires the person responsible for it. Now, again, this is one of those things where sort of like Doge itself, where it's like, I like the idea of government efficiency, right? Yeah, sure, Doge. I like the idea of the BLS sort of doing a better job in some way or addressing these responses. But like Doge, which, you know, we all have seen how that's turned out. I think there are a lot of more than a lot of questions, more than a lot of questions about whether firing to BLS and replacing the head with someone who's a Trump appointee will add a more credible, transparent data quality.

Tracy Alloway (3:19)

Right. One thing that we have learned from all our episodes on data collection in the US is that it is actually a really, really insanely labor intensive thing to do. You have to actually call up a bunch of people, homeowners, for instance, or you have to call up a bunch of businesses and ask questions. You have to go out into the field and gather individual prices. And we can have a debate over whether or not you could maybe use new technology, price scanning data to make all of that more efficient. But for the time being, that's how it's done. And so you need people to do it. And if Doge comes in and eliminates a big chunk of the budget, then it becomes harder to do.

Joe Weisenthal (3:57)

Or if it just gets more costly and the budget's going up. And then the one thing I would say is that in our conversations, and again, you have talked to the BLS many times, they are really good. They are professionals and they take it very seriously.

Tracy Alloway (4:09)

They are very responsive. However, we could talk about this a little bit, perhaps less responsive than they used to be in recent weeks. So anyway, we should talk about all of this. I think it's really important. And as you said, there are big questions, like what happens if a president ousts a BLS chief and then introduces a new one. We have the perfect guest, someone we've spoken to before about the decline of America's data infrastructure. We're going to be speaking with Bill Beach. He is, of course, the former Commissioner of Labor Statistics, former head of the BLS. So Bill, thank you so much for coming back on Odd Lots.