The federal hiring freeze initiated during Trump’s administration has led the Bureau of Labor Statistics (BLS) to limit its data collection efforts, impacting one of the key indicators of inflation in the U.S. This was reported by the Wall Street Journal on Wednesday.
The BLS, which started implementing these changes in April, reduced the number of businesses monitored for prices on its consumer price index (CPI) reports. They attributed this to the staffing freeze that President Trump enforced right from his first day in office, January 20.
An email from the BLS to private economists stated, “The CPI has temporarily reduced the number of outlets from which they collect data due to staff shortages in certain cities.” This reduction will remain until the hiring freeze is lifted and more personnel can be brought on board.
The CPI is crucial as it offers near-real-time estimates of inflation, influencing decisions made by economists, investors, and policymakers. It tracks price changes on a wide variety of goods and services, from groceries to airline tickets, providing monthly updates on overall prices.
However, some economists express concern that this decrease in data collection staffing may have already compromised the integrity of the data being reported. After the Trump administration disbanded the advisory committee at BLS and the Commerce Department, these worries have only intensified.
“The hiring freezes in the federal government and potential budget cuts across agencies are beginning to impact the quality of our economic indicators,” remarked Omea Sharif, president of Inflation Insights. She noted changes in how the CPI for April was developed and highlighted that BLS would no longer produce numerous indices for producer prices.
Sharif further pointed out that, although these statistics feed into interest rates and tax policies—affecting everyday lives—diminishing their quality could have negative repercussions for future economic conditions.
A CPI report released on May 13 indicated a drop in headline inflation to 2.3% annually for April, marking the slowest annual rise in more than four years. The broad tariffs imposed by Trump are intended to influence inflation data, a move that most economists believe will lead to at least a temporary increase in prices.
