Department of Labor's Watchdog to Review BLS Economic Data Practices

The internal oversight body within the Department of Labor has announced plans to conduct an evaluation of the Bureau of Labor Statistics (BLS) methodologies regarding the collection and reporting of economic data. Laura Nicolosi, who serves as the assistant inspector general for audit at the Labor Department’s Office of Inspector General, communicated this intention in a letter dated September 10 to William Wiatrowski, the acting commissioner of the BLS. The scrutiny comes after the Labor Department made significant revisions to previous payroll gain estimates, revealing that over 900,000 jobs were added in the 12-month span ending March 2025 compared to earlier reported figures.

The Bureau employs separate surveys targeting both households and businesses to generate its monthly employment report. Furthermore, it utilizes various additional measures to gauge job market conditions, including claims for unemployment benefits at the state level. The Labor Department periodically adjusts its reported figures based on more robust data acquired down the line. The ongoing investigation will also delve into the processes surrounding the collection, reporting, and revision of the Producer Price Index and the Consumer Price Index, key measurements of inflation, as inflation rates have surged across the country this year.

The probe follows the dismissal of former BLS commissioner Erika McEntarfer by President Trump, who accused her of showing political bias after a disappointing employment report for July indicated weaker job growth than anticipated. Trump stated that he felt compelled to replace McEntarfer with a more qualified individual, underscoring his belief that essential statistics must remain free from political manipulation. While the White House has referred inquiries about the review to the Labor Department, no immediate response has been provided. A spokesperson from the Office of Inspector General emphasized that they could not share beyond the information already accessible on their website.

In the aftermath of these developments, McEntarfer asserted her defense of the BLS's data collection techniques, highlighting the dedication of the bureau’s staff in enhancing economic data quality, despite ongoing budgetary constraints. Trump's actions have stirred unease among economists and policymakers regarding the integrity of federal labor data. The National Association of Business Economists expressed concern, warning that diminished trust in these official statistics could destabilize financial markets and the broader U.S. economy, potentially leading to increased volatility, reduced investment by businesses, higher borrowing costs, and slower economic growth affecting households and global markets alike.