Firing the bearer of bad news is no good. Trustworthy, nonpolitical economic data is essential for a healthy economy
Like many financial advisors, I base many of my recommendations to clients on government economic data from the Bureau of Labor Statistics. Investors, advisors, and markets around the world depend on this unbiased information.
This is why President Trump’s August 1 firing of Dr. Erika McEntarfer, Commissioner of the Bureau of Labor Statistics, was stunning. She was fired, not for misconduct or mismanagement, but because the president didn’t like the weaker-than-expected numbers in the July jobs report.
The economy added only 73,000 jobs, well below the forecast of 115,000. More alarming were revisions to previous months: May’s job gains dropped from 144,000 to 19,000, and June’s from 147,000 to 14,000. While revisions of previously posted reports are common, a 90% downward revision is extraordinarily rare.
Trump called the report “RIGGED” on social media and accused the BLS of deliberately manipulating data to hurt him politically.
McEntarfer had served for slightly more than a year, having been appointed by President Biden and confirmed in 2024. Despite the BLS leader being a political appointee, the bureau’s employees are nonpartisan career professionals who do essential work that typically receives little public notice. The data they compile affects economic factors like inflation projections, interest rates, and even retirement recommendations from financial advisors.
It’s tempting to dismiss this as political theater, but the implications go much deeper. Historian Heather Cox Richardson wrote that authoritarian governments “make up statistics to claim their policies are working well, even when they quite obviously are not.”
Former Treasury Secretary Larry Summers, in an interview with ABC news, said, “This is the stuff of democracies giving way to authoritarianism.” He also pointed out, "These numbers are put together by teams of literally hundreds of people following detailed procedures that are in manuals. There's no conceivable way that the head of the BLS could have manipulated this number."
Even some conservative economists and commentators, who might be expected to side with the President, are sounding alarms. Those who criticized the firing included Bill Kristol, Michael Strain of the American Enterprise Institute, and William Beach, Trump’s own former BLS commissioner.
On the day of the firing and the jobs report, markets dropped: the Dow by 1.23%, the S&P 500 by 1.60%, and the Nasdaq by 2.24%. This reaction demonstrates not only concern about weak job growth but also uneasiness about the reliability of the data.
Commissioner McEntarfer’s firing is yet another decision in a growing list that quietly undermines the foundation of our financial markets. The pace of destabilizing policy decisions from this administration is relentless. It’s overwhelming at times and difficult to track. But this one stood out. It is a direct challenge to the objectivity of economic data.
It is also a blow to the emotional confidence that keeps markets functioning. Trustworthy economic data provides a stable foundation for both individuals and businesses to make financial decisions. When that trust gives way to uncertainty, real financial consequences result. Business owners delay expansion; retirees postpone travel; investors move to cash. The economy slows.
Concern over this firing goes beyond being for or against Donald Trump. It is about whether we want an economy grounded in truth or in whatever narrative benefits whoever holds power. When truth-tellers are punished for doing their jobs, it sends a chilling message to markets and to citizens.
The markets that affect your financial wellbeing don’t just run on earnings and interest rates. They run on truth, virtue, and trust. When those are threatened, we all lose far more than access to reliable statistics. We lose the very foundation that keeps our economy and our democracy functioning. That is something no portfolio can diversify away.
Rick Kahler, CFP, is a fee-only financial planner and financial therapist with a nationwide practice, Kahler Financial Group, based in Rapid City. His co-authored books include Coupleship Inc. and The Financial Wisdom of Ebenezer Scrooge.
Photo: public domain, wikimedia commons
The South Dakota Standard is offered freely and is supported by our readers. We have no political or commercial sponsorship. If you'd like to help us continue our mission to advance independent political and social commentary, you can do so by clicking on the "Donate" button that's on the sidebar to your right.
