--:-- [Theme music fades out]
--:-- Jessica Mendoza: Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Monday, August 4th.
--:-- Matt Grossman: On Friday, the Bureau of Labor Statistics released its monthly jobs report. Our colleague Matt Grossman, who covers business and financial news, was following the story as he usually does.
--:-- Matt Grossman: Friday morning started with a routine jobs report from the Bureau of Labor Statistics. This is a report that we get every month on the first Friday of the month, giving information on the previous month's labor market. This jobs report was the weakest one to come since the beginning of President Donald Trump's second term.
--:-- Matt Grossman: The report said that the economy added 73,000 jobs in July, which was less than economists had expected. But maybe the bigger news was that the Labor Department said that in May and June, the economy actually added 258,000 fewer jobs than it had initially reported in those months.
--:-- Matt Grossman: To economists, it was clear. The report showed signs of a slowing economy. And that really seemed to enrage President Trump. And a few hours later, he announced that he was firing the commissioner of the Bureau of Labor Statistics, Erica McIntarfer, alleging that she was presiding over an office that was rigging the statistics to make a political point against him.
--:-- Jessica Mendoza: For decades, the Bureau of Labor Statistics, which is part of the Labor Department, has been relied upon as a nonpartisan and impartial agency. And there's really, for decades, never been any serious allegations that the numbers are skewed for political purposes.
--:-- Jessica Mendoza: So it was very unusual for a president to add a political spin to the office and was really a shock to people who follow the statistics.
--:-- Jessica Mendoza: Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Monday, August 4th. Coming up on the show, the drama over data at the Bureau of Labor Statistics.
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--:-- Jessica Mendoza: What is the Monthly Jobs Report? What's in it?
--:-- Matt Grossman: The Monthly Jobs Report has two main sets of data. One is called the Establishment Survey, which asks about 120,000 businesses. Very simple question, how many people work for you?
--:-- Matt Grossman: And that survey is used to get a picture across the whole economy of how many jobs are being created or destroyed. How many people have been hired? How many people have lost their jobs?
--:-- Matt Grossman: Of course, this is a number that politicians always fixate on. This robust growth, 4.2%, is touching the lives of all our people. Our business has created another 121,000 jobs last month.
--:-- Matt Grossman: We often hear a president talking about how many jobs were created during his term or during the previous president's term. Now it's 4 million jobs created since the election. 528,000 jobs were added just last month to this country's employment.
--:-- Matt Grossman: In addition to asking businesses about their hiring numbers, the Labor Department also surveys households about employment. That survey is the basis for the nation's unemployment rate.
--:-- Matt Grossman: So the monthly jobs reports combining these two sets of information the payroll survey and the household survey to give first of all the job creation totals and second of all the unemployment rate.
--:-- Jessica Mendoza: And running the whole show here at the Bureau of Labor Statistics was Dr. Erica McIntarfer. Can you tell us about her? How long has she worked in government? What's her background?
--:-- Matt Grossman: So, like most people who lead the BLS, McIntarfer had a Ph.D. in economics. Joining the government statistics agencies was her first career after she finished graduate school.
--:-- Matt Grossman: Erica McIntyre had been in government since 2002. She spent most of her career at another statistics-heavy agency, the Census Bureau.
--:-- Matt Grossman: And she was really involved in the meat and potatoes of how the government does economic statistics. She rose through the ranks as a really notable labor economist within the Census Bureau, someone who is really focused on developing the best statistical techniques possible to gauge what it's like to be a worker in the United States, how people's careers were evolving, how policy trends were affecting people's careers.
--:-- Matt Grossman: McIntarfer also spent a couple of years at the Treasury Department and worked for both Republican and Democratic administrations through the course of her career.
--:-- Matt Grossman: She rose to the head of the Bureau of Labor Statistics in 2024, when she was nominated by then-President Joe Biden and confirmed by the Senate 86 to 8.
--:-- Jessica Mendoza: How well did she do leading BLS that first year?
--:-- Matt Grossman: People who worked with McIntarfer throughout her career, including at BLS, said that she's really a great example of what it takes to do this job well.
--:-- Matt Grossman: She has a mix of experience that can be kind of hard to find. She's a statistician statistician, but she's also somebody who has experience in like communication.
--:-- Matt Grossman: Yeah, that's exactly right. But the agency did face some criticisms during McIntarfer's tenure. There were a couple times last year in 2024 when the agency kind of mishandled how it announces statistics.
--:-- Matt Grossman: In one case, it posted them too early. In another case, a subgroup of people got to see them earlier than others.
--:-- Matt Grossman: And that's a really big deal because investors can win or lose millions of dollars based on how they trade right when the statistics come out.
--:-- Matt Grossman: So it's really important that nobody has any kind of time advantage or gets to see the numbers before others.
--:-- Jessica Mendoza: That said, there's been really no criticism from professional economists that she mishandled the statistics themselves, that there was any shortcomings in their accuracy or any deviation from how they're normally produced.
--:-- Jessica Mendoza: That seems like an important distinction, the accuracy of the numbers versus the timing of the release.
--:-- Matt Grossman: Yeah, absolutely. And that really landed front and center because it's something that President Trump fixated on.
--:-- Matt Grossman: Trump has criticized the Bureau of Labor Statistics before. One notable instance came last year on the campaign trail.
--:-- Matt Grossman: Then-candidate Trump accused the agency of helping the Biden administration. He claimed that revisions to the jobs data showed that Biden and then-Vice President Kamala Harris were cooking the numbers.
--:-- Matt Grossman: Professional economists really push back on that. They say that the revisions are routine, that they can make headlines, but recently they really haven't been any bigger than they normally are.
--:-- Matt Grossman: And people who do this for a living explain that it's just a really hard problem to make these statistics every month and to balance doing them accurately and quickly enough to get them just a couple weeks after the month that they're supposed to represent.
--:-- Jessica Mendoza: Are these revisions to the jobs report common? This is standard?
--:-- Matt Grossman: Yeah, it's absolutely standard. There's nothing uncommon or surprising about any of this.
--:-- Matt Grossman: The BLS has been, in fact, doing this the very same way for decades. The revisions almost work like if you're planning a wedding and you're getting RSVPs from different guests.
--:-- Matt Grossman: At some point, there's a deadline where you have to tell the caterer how many people are going to show up, but you might not have gotten RSVPs from all the guests yet.
--:-- Matt Grossman: And at that point, you kind of have to make your best guess about what the guests that you haven't heard from yet are going to tell you.
--:-- Jessica Mendoza: Friday's jobs report had a big revision, and it painted a picture of a weaker economy than previously thought.
--:-- Matt Grossman: It's routine for the Labor Department to revise previous months as it gets new data, but this was a really negative revision, one that was a little bit bigger than revisions have been recently.
--:-- Matt Grossman: President Trump has fit these revisions into a narrative that he's been looking at for years now, which is a complaint that the statistics are intentionally rigged against him.
--:-- Matt Grossman: I believe the numbers were phony just like they were before the election. And there were other times.
--:-- Matt Grossman: So you know what I did? I fired her. And you know what? I did the right thing.
--:-- Jessica Mendoza: And has McIntyre or anyone from the Bureau of Labor Statistics responded to this criticism?
--:-- Matt Grossman: We've reached out to McIntyre over the past few days. She hasn't responded to our request for comment.
--:-- Matt Grossman: The BLS has just sort of gone about its business as it usually does. It's provided the same amount of information about its revisions as it always has.
--:-- Matt Grossman: And from the BLS's perspective, you know, it's just business as usual.
--:-- Jessica Mendoza: After she was fired, McIntarfer posted on social media saying that serving as the head of the Bureau of Labor Statistics was, quote, the honor of my life.
--:-- Jessica Mendoza: The Friends of the Bureau of Labor Statistics is an independent organization that advocates for transparent government data, and it released a statement after McIntarfer was ousted.
--:-- Jessica Mendoza: It called Trump's claims of data rigging, quote, baseless and damaging, and said that the firing of McIntarfer is without merit.
--:-- Jessica Mendoza: Beyond the events of the past few days, the Bureau of Labor Statistics is also facing other big challenges. That's after the break.
--:-- Jessica Mendoza: My marathon isn't about time. It's about my 26 friends with intellectual disabilities I'm dedicating each mile to. I'm Joseph. I'm running my first Bank of America Chicago Marathon for Special Olympics Illinois to help give my friends a place to shine.
--:-- Jessica Mendoza: Join Bank of America in supporting Joseph's cause. Give if you can at bofa.com slash supportjoseph.
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--:-- Jessica Mendoza: Good afternoon and thank you so much for that wonderful introduction. And thanks so much for the opportunity to speak here in Atlanta today.
--:-- Jessica Mendoza: That's Erica McIntyrefer giving a speech earlier this year detailing problems and challenges at her agency, the Bureau of Labor Statistics.
--:-- Jessica Mendoza: Of course, we face real challenges at the federal level as well, which endanger much of the official data that I've been talking about today and that we currently rely on.
--:-- Jessica Mendoza: McIntarford really emphasized that there are two challenges that the BLS is up against. First of all, it costs more and more to do this work because salaries are going up and the cost of keeping up with technology is going up.
--:-- Jessica Mendoza: But on the other hand, they're getting less participation from the businesses and households that they need to participate in these surveys.
--:-- Jessica Mendoza: So most of our official data depends on surveys, and response rates to surveys are down here in the U.S. and worldwide.
--:-- Jessica Mendoza: And what has that meant for BLS and for those who rely on its data, particularly the low response rates?
--:-- Matt Grossman: So far, most economists think that the low response rates are not a serious problem to creating good statistics because one thing that the BLS has going for it is that the size of its surveys are just huge.
--:-- Matt Grossman: To survey 60 households and 120 businesses every month just a gigantic survey compared with the kinds of numbers that you see in a political poll for example.
--:-- Matt Grossman: These are just much, much bigger surveys. And so the response rate is going down, but it's starting at such a high number of respondents that so far they've sort of been able to afford taking a bit of a hit on this front.
--:-- Jessica Mendoza: That said, economists are really concerned that going forward, the BLS is going to have to find new ways of doing business.
--:-- Jessica Mendoza: So what's the upshot of these challenges for the BLS?
--:-- Matt Grossman: Well, in some places, they are having to do more guesswork.
--:-- Matt Grossman: Interestingly, that's not yet because the survey responses are down. So far, again, their baseline surveys are so big that even with lower response rate, the guesses haven't really gotten less precise.
--:-- Matt Grossman: The one reason that they have gotten less precise so far this year is that there's a staffing shortage.
--:-- Matt Grossman: This is a new problem that has started in 2025, which the BLS has attributed to this federal hiring freeze that President Trump put in place starting in January.
--:-- Jessica Mendoza: What are outside watchers saying about the state of the BLS, given these challenges that you've just laid out?
--:-- Matt Grossman: Does it need a revamp?
--:-- Jessica Mendoza: I think a lot of economists would be really frightened at the idea of a revamp because despite the problems, the BLS has really worked the way that it's supposed to.
--:-- Jessica Mendoza: Yes, there are funding challenges. There have been a few communication stumbles recently. But economists, even from other countries, really esteem the BLS as one of the best agencies in the world at what it does.
--:-- Jessica Mendoza: And doing this in a really nonpartisan, nonpolitical way, there are a lot of best practices that are really deeply embedded in how the BLS does its work.
--:-- Jessica Mendoza: If Trump did appoint a BLS chief, which it's likely that he will, what would happen if that person then presented job numbers more in Trump's favor?
--:-- Matt Grossman: That is a huge question right now.
--:-- Matt Grossman: People who have worked at the BLS at the highest levels tell me that it would be very hard for the BLS commissioner to have any influence on the numbers under the current system.
--:-- Matt Grossman: The BLS commissioner doesn't find out what the numbers are until a couple days before they're released to the public.
--:-- Matt Grossman: Former commissioner of the BLS, William Beach, has said that the numbers are already hard-coded into the computer system by the time the commissioner gets to see them.
--:-- Matt Grossman: So, you know, he and some of his other fellow former commissioners have said that the way the system works now, it would be very, very difficult for the head of the BLS or anyone else in a political position at the bureau to put their thumb on the scale.
--:-- Jessica Mendoza: And what will you be looking at next?
--:-- Matt Grossman: There are a lot of questions here. Who will President Trump appoint to be the next commissioner?
--:-- Matt Grossman: How will that person handle the job? How will they be a normal BLS commissioner as we've had for decades?
--:-- Matt Grossman: Or will it be a much more politicized BLS in how it communicates and how it does its business?
--:-- Jessica Mendoza: And Matt says the whole bureau is now on shakier ground than at any other moment in modern history.
--:-- Jessica Mendoza: The Bureau of Labor Statistics has been in a gradually worsening position for a decade where they've had to do more with less.
--:-- Jessica Mendoza: They haven't gotten the funding that they've needed to improve their methods. And yet they've still been doing their jobs as well as they can and as far as we can tell.
--:-- Jessica Mendoza: So very quickly, we moved from an agency that was sort of doing its best and persisting despite some challenges to one that is really facing a more acute situation than it's seen in decades.
--:-- Jessica Mendoza: That's all for today, Monday, August 4th. The Journal is a co-production of Spotify and The Wall Street Journal.
--:-- Jessica Mendoza: Additional reporting in this episode by Justin Lehart, Alex Leary, and Brian Schwartz.
--:-- Jessica Mendoza: Thanks for listening. See you tomorrow.
