President Donald Trump recently dismissed Bureau of Labor Statistics (BLS) Commissioner Erika McEntarfer in the aftermath of July's weak employment report, which featured downward revisions to previous months. The BLS had reported that July saw just 73,000 new nonfarm payroll jobs, while May and June’s numbers were sharply revised downward to 19,000 and 14,000 respectively, marking the largest revision since 1968. Many economists attributed the slowdown to trade tensions and policy uncertainty.
The revisions, though unusually large, were not without precedent and reflected a process rather than political bias, according to Hal Ratner, who is the head of research for Morningstar Investment Management. As Ratner noted in a recent report, the BLS releases preliminary job estimates based on incomplete survey data, supplemented by models, and then updates the figures when more surveys are returned.
"It’s essential to bear in mind that while some of the Bureau of Labor Statistics’ data may appear to exhibit bias or prove to be inaccurate after the fact, this is not due to political or ideological orientation," Ratner wrote. "Rather, it’s the result of difficulties in collecting and processing huge amounts of data." In other words, Ratner argues, the revisions are a result of the process, rather than bias.
But now McEntarfer has to be replaced, and Ratner suggests leading candidates include Kevin Warsh, a former Federal Reserve governor with deep policy experience, and Kevin Hassett, a political strategist and former National Economic Council director. While Warsh’s credentials may make him a contender for other economic posts, Hassett’s political background and media presence could position him as the likelier choice for BLS chief. A third option may be William Wiatrowski, deputy commissioner who serves as the interim head.
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