Bureau of Labor Statistics Faces Criticism Over Job Data
During an appearance on “Morning Joe” Thursday, Treasury Secretary Scott Bessent criticized the Bureau of Labor Statistics (BLS) for relying on “corrupted” data, which led to significant errors in job estimates.
In their latest report, the BLS indicated that only 73,000 jobs were added in July and revised previous figures for May and June downwards, despite a 3% growth in the Gross Domestic Product (GDP) for the second quarter. This prompted President Donald Trump to dismiss Commissioner of Labor Statistics Erika McEntarfer. Bessent likened the BLS’s mistakes to a plane going off course.
“I think this was really overdue. The error they made last week was massive, really a five to six standard deviation mistake,” Bessent said to co-host Mika Brzezinski. “It’s like thinking you’re flying to New York and ending up in Denver. Cleaning up the BLS was something that should have happened long ago.”
A standard deviation measures how much variation exists from the average, according to Math.net. In August 2024, the Biden administration acknowledged it had overestimated job creation by over 800,000 positions.
“You know, Mika, something isn’t right here. The Federal Reserve decided not to cut rates on Wednesday, and then on Friday, the BLS had this major downward revision. One of these has to be wrong,” Bessent stated. “Either the Fed economists overlooked something, or the BLS data was flawed. There’s been a lot of mediocrity tolerated in government.”
Bessent explained that the BLS used to have complete surveys but has now dropped to relying on only 30% of the actual data, making assumptions to fill in the gaps. “This change is long overdue, and the head of BLS is accountable,” he added.
Co-host Joe Scarborough pressed Bessent about the evidence behind his claims regarding BLS inaccuracies.
“This was the largest revision in 30 years, a five standard deviation miss,” Bessent responded. “It’s not just that you landed in Newark instead of New York; you landed in Denver. If employers aren’t providing correct data, it’s the BLS’s responsibility to find new data collection methods. It seems very lazy to just keep doing things the old way and expect different results.”
