Data war risks creating false calm

Political pressure on government statisticians and private forecasters risks sending markets down a rabbit-hole, which could suppress volatility today but lead to seismic reality checks in the future.

- Mike Dolan

US President Donald Trump has sideswiped both private and public sector economists this month, firing the Bureau of Labor Statistics (BLS) boss for what he described as “rigged” jobs data and then lambasting Goldman Sachs for tariff-related research he didn't agree with.

These moves seem alarming, even if there are some mitigating factors.

Mr Trump is hardly the first person to criticise BLS payrolls data. It has been under scrutiny for years, not because of fears of bias, but because of low survey response rates and delays, which have often resulted in large changes to past data. The most recent report contained one of the biggest downward revisions in decades. The BLS can argue that it has suffered from years of underfunding, but it's still not a good look.

What's more, similar questions about data collection have been lobbed at the BLS regarding its compilation of monthly consumer and producer price reports, which are critical now in assessing the impact of Mr Trump's tariff rises on inflation.

These statistics, along with the US employment report, are the most important monthly updates for financial markets, mainly because they play a pivotal role in Federal Reserve thinking, given its dual mandate to maintain maximum employment and stable prices.