Erika McEntarfer, recently confirmed by the Senate as President Joe Biden’s newest Commissioner of BLS. She was last dismissed by former President Donald Trump immediately after the disastrous February jobs report was announced. Trump accused her of firing for manipulating data, but produced no evidence to back up his claim. This has led to legitimate fears regarding the integrity of economic data, as well as the potential for political meddling within vital statistical agencies.
McEntarfer’s confirmation in 2024, following a strong bipartisan Senate vote, set her legacy in stone, for it proved acceptance on both sides of the aisle. Her abrupt termination has sparked anger and outrage among many economists and former government officials. For them, it’s a preposterous attempt to rosy up the labor stats right as we’re on the brink of a recession in the U.S. economy.
The monthly national jobs report was released just hours prior to McEntarfer’s firing. It exposed the dramatic hiring slowdown, masking that the economy added an average of just 35,000 jobs over the three months ending in July. This number represents an almost halving from the anemic average of about 128,000 jobs added per month over the last three-month period before this one. Even with this sharp jobs slowdown, the unemployment rate still ended the year at a low 4.2%. As Black unemployment is increasingly concerning, this is an ominous warning sign of job losses to come for other demographic groups.
William Beach, McEntarfer’s predecessor at the BLS, unequivocally condemned Trump’s decision. He stated, “The totally groundless firing of Dr. Erika McEntarfer, my successor as Commissioner of Labor Statistics at BLS, sets a dangerous precedent and undermines the statistical mission of the Bureau.”
Economists are speaking of rising recession risks in ever louder tones. Mark Zandi, chief economist at Moody’s Analytics, noted that “the risks are increasingly high that we’re going into recession.” Yet he did blame much of this slowdown on the impact of Trump’s tariffs. These Section 232 tariffs acted to tax imported goods, particularly steel and aluminum. First, these tariffs increase costs for both foreign and domestic projects via a factory gate price that tariff-imposing countries have to pay. Zandi explained that “often there’s an event that causes people to lose confidence, change behavior and start a downward spiral,” emphasizing that predicting such events is challenging.
As economic indicators continue to fluctuate, some analysts argue that political narratives play a role in shaping public perception of the economy. Mark Blyth, a political economist, remarked, “If you don’t like the administration’s policies, you’re willing it to be a recession and if you like them, you’re saying, ‘no.’” One important note, he said, is that people should not dismiss the recent jobs read as the beginning of a recession. He stresses that it’s not a clear signal of an impending economic downturn.
In her statement released after her dismissal, McEntarfer noted her appreciation for serving in the role at the BLS. She stated, “It has been the honor of my life to serve as Commissioner of BLS alongside the many dedicated civil servants tasked with measuring a vast and dynamic economy. It is vital and important work and I thank them for their service to this nation.”
Her firing has put a spotlight on the way that labor statistics are collected and reported. Economists can all agree that if political agendas continue to trump statistical integrity, the erosion of trust in economic data will continue.
In addition, uncertainty continues to shroud the economic picture. For now, analysts are deep in the weeds trying to predict what McEntarfer’s firing, and the overall state of employment trends, really means. Claudia Sahm, an economist who has studied economic downturns extensively, noted that “we’re not there yet – and maybe this thing gets turned around. But that’s increasingly becoming hard to do with each passing week.”
Policymakers and analysts alike are still trying to come to terms with new economic figures that point to a cooling job market. The national implications of these watershed achievements continue to develop amid unprecedented political tumult. As Democrats and Republicans respond to this challenge, the nation’s economic future is looking more and more grim.
