A Practical Guide to Fixing the Jobs Data Problem

President Donald Trump started a firestorm over the reliability of US economic data when he fired the head of the Bureau of Labor Statistics following the agency’s July nonfarm payrolls report. The report wiped 258,000 jobs that were previously counted in May and June, the largest downward revision in decades outside of the Covid pandemic.

A miss that big was guaranteed to draw scrutiny. The BLS’s jobs and inflation data are arguably the most important numbers the government compiles because the Federal Reserve relies on them to conduct monetary policy. The Fed has long been criticized for reacting too slowly to economic developments, an inevitable consequence of relying on lagging government data. Now the Fed and BLS are likely to face even more pressure to catch up.