How and Why Federal Job Data Changes Over Time

The Jobs Report and the Debate Over Its Accuracy

The Bureau of Labor Statistics (BLS) has become a focal point in a heated political debate following recent revisions to its jobs report. These changes have sparked accusations that the data was manipulated for political reasons, especially after President Trump fired the agency’s head earlier this month. However, most economists argue that the revisions are a standard part of the process and not politically motivated.

The BLS revised down employment numbers for May and June by 258,000 jobs, which led to criticism from the president and his allies. Despite these claims, the agency maintains that it revises its data to incorporate more comprehensive information from nationwide surveys. As a result, the BLS remains the gold standard for macroeconomic data in the United States.

Why the Jobs Report Gets Revised

Each month, the BLS conducts surveys of over 120,000 employers via email and phone, collecting data on wages, total employment, and other relevant factors. At the end of each month, it publishes an initial estimate of job growth based on the data it has gathered. In addition, the agency also conducts a household survey to track employment status and take-home wages across the country.

Over the next two months, the bureau issues updates to its estimates, incorporating additional responses and adjusting for seasonal variations. While the August revisions surprised many economists, they were not the first time the BLS made significant changes. During the pandemic, the agency had to revise many of its estimates, such as reducing its June to September job growth estimate by 626,000 positions in the summer of 2021.

Challenges in Data Collection

Over the past two decades, several key BLS surveys have faced declining response rates. The Federal Reserve Bank of San Francisco estimates that response rates to the employment survey are around 45 percent, down from about 60 percent before the pandemic. However, the bank noted that limited responses did not seem to affect the size of the BLS’s revisions after 2022.

Despite these challenges, the agency's initial job estimates have gradually become more accurate over more than 60 years of data collection, according to analysis by Ernie Tedeschi, an economist at the Yale Budget Lab.

Calls for Modernization and Funding

Advocates say that while President Trump’s claims of political bias are unfounded, the BLS could benefit from increased funding to modernize its operations, particularly its Current Population Survey, which polls households rather than businesses. A group of former BLS heads has asked Congress to fund the agency with at least $770 million for the upcoming fiscal year.

In a letter to appropriators, the group stated that additional funding would allow the agency to move forward with planned updates to its data collection methods. Among these efforts is the implementation of an online response model for the Current Population Survey.

Additional funding, according to William Beach and Erica Groshen, would also help the BLS maintain detailed data for important statistics like the Consumer Price Index, which tracks price inflation. The agency relies on data collectors who travel across the country to monitor prices of goods and services.

Beach, who was Trump’s BLS pick during his first administration, explained the importance of this work: “The field person will literally pick up a jar of, if I could say Pringles, and they’ll say, well last month, we had 36 Pringles in here, and it’s this month, it’s the same price, but we only have 32 Pringles in here,” he said. “That means that the product has actually gone up in price.”

Concerns About Budget Constraints

Last summer, the BLS considered cutting the population survey’s sample size by 5,000 households due to budget constraints. This decision raised concerns among advocates who believe that maintaining the quality of data is essential for accurate economic reporting. With the right resources, the BLS can continue to provide reliable and timely data that informs policy decisions and public understanding of the economy.