The Department of Labor's Office of Inspector General (OIG) has initiated a comprehensive review of the Bureau of Labor Statistics' (BLS) methodology for collecting and reporting crucial economic data. This action follows recent controversies surrounding significant downward revisions to previously released employment figures and accusations of political bias.
Assistant Inspector General for Audit, Laura Nicolosi, detailed the scope of the investigation in a September 10th letter to acting BLS Commissioner William Wiatrowski. The OIG will scrutinize the BLS's processes for compiling and disseminating monthly inflation and jobs data, specifically addressing the substantial discrepancy between initial and revised payroll growth numbers for the twelve-month period ending March 2025. This revision showed a shortfall of over 900,000 jobs compared to initial reports.
The BLS employs dual surveys – one targeting households and another focusing on businesses – to generate its monthly employment report. Supplementary data, such as state unemployment claims, also inform the department's assessments. While revisions are standard practice as more complete information becomes available, the magnitude of the recent corrections has raised concerns.
The investigation will extend to the data collection, reporting, and revision processes for the Producer Price Index (PPI) and the Consumer Price Index (CPI), two key indicators of inflation. The rising inflation rate in the U.S. this year further underscores the urgency of this review.
The OIG's investigation was triggered, in part, by President Trump's dismissal of former BLS Commissioner Erika McEntarfer. The President publicly accused McEntarfer of political bias following a July employment report indicating weaker-than-expected job growth. This controversial action has generated significant anxiety amongst economists and policymakers.
The National Association of Business Economists issued a statement emphasizing the critical importance of maintaining public trust in official statistics. They warned that erosion of this trust could severely destabilize financial markets, stifle business investment, inflate borrowing costs, and ultimately hinder economic growth. The potential ramifications extend globally, impacting households and businesses worldwide.
While the OIG declined to comment beyond the information published on its website, the ongoing review highlights the crucial role of accurate and unbiased economic data in maintaining economic stability and public confidence in government institutions.
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Originally published at: https://www.cbsnews.com/news/bls-jobs-inflation-department-of-labor-trump/
