BLS Statistics

 This article explains why this matters at the start:

When I was told Friday that President Trump fired the BLS commissioner due to a poor July payroll report (a less-than-expected monthly job add of 73,000 and very large negative two-month revision of 258,000), I waited for a laugh track that never came.

He did what? Really?

I spent most of the weekend shaking my head and laughing that the president would fire BLS Commissioner Erika McEntarfer for a lousy Non-Farm Payroll report.

Then I thought about it a bit more.

Most of us who have been in the markets have probably spent at least six of the 12 first Fridays of the month every year scratching our heads when the monthly report is released. Our staff economist leads us through the various seasonal adjustments, model adjustments, survey participation rates, data revisions to the last two reports and other assorted “kinks” in the reporting, and by the end it usually sounds like nonsense. I believe these monthly reports warrant a good dose of skepticism.

It gets better and explains Trump's suspicions of BLS data and intent:

“Super Users”

The New York Times reported that in January 2024 a BLS staff economist engaged in highly inappropriate communication revealing material nonpublic information to a select group of banks and hedge funds. From the Times:

In an email addressed to “Super Users,” the economist explained a technical change in the calculation of the housing figures. Then, departing from the bureaucratic language typically used by statistical agencies, he added, “All of you searching for the source of the divergence have found it.”

To the inflation obsessives who received the email — and other forecasters who quickly heard about it — the implication was clear: The pop in housing prices in January might have been not a fluke but rather a result of a shift in methodology that could keep inflation elevated longer than economists and Federal Reserve officials had expected. That could, in turn, make the Fed more cautious about cutting interest rates.

That kind of information had tremendous value in the wrong hands.

There was an uproar when news of the Super User group leaked. When confronted in early March 2024 by news outlets, the BLS called what happened a mistake and denied there was an actual “Super Users” group, but rather a one time reply to multiple inquiries. From Bloomberg News:

“To expedite a response, the employee blind-copied a number of requesters and referred to them as super users — this was a mistake,” said Jeffrey Hill, a BLS associate commissioner.

The New York Times filed a FOIA with BLS, and found there was indeed a “Super User” list, kept by at least one “low ranking” staff economist who was communicating with a number of banks, money managers and hedge funds.

The emails show that the employee did engage in extended, one-on-one email exchanges with data users about how the inflation figures are put together. Such details, though highly technical, can be of significant interest to forecasters, who compete to predict inflation figures to hundredths of a percentage point. Those estimates, in turn, are used by investors making bets on the huge batches of securities that are tied to inflation or interest rates.

In at least one case, emails to super users appear to have shared methodological details that were not yet public. On Jan. 31, the employee sent an email to his super users describing coming changes to the way the agency calculates used car prices, at the time a crucial issue for inflation watchers. The email included a three-page document providing detailed answers to questions about the change, and a spreadsheet showing how they would affect calculations.

“Thank you all for your very difficult, challenging and thoughtful questions,” the email said. “It is your questions that help us flesh out all the potential problems.”

The questions also seemed to have fleshed out for the Super Users important changes to how the BLS was changing their calculations of the CPI two weeks before their official release in mid-February! 

This sort of insider sharing of nonpublic information is the sort of insider information that can be worth big money to those who are connected and rich.