Following the dismal jobs numbers that were released last Friday, Trump fired the commissioner of the Bureau of Labor Statistics Erika McEntarfer, accusing her (without any evidence of course) of cooking the books to get low growth numbers in order to make him look bad.

These jobs numbers are used by the Federal Reserve as one measure in its efforts to control inflation, and are also used by the broader business and investment communities to gauge the state of the economy and make appropriate decisions. Hence it is important that they see these numbers as credible as otherwise they are useless. Up until now, the BLS has been seen as credible. Following McEntarfer’s firing, the BLS is temporarily being run by Bill Wiatrowski, the deputy commissioner, who is a career professional with the agency, until Trump appoints a new commissioner. But Trump’s action has resulted in the credibility of the BLS being seriously undermined, irrespective of whatever the new permanent head does or however sterling their reputation, because that person will have the taint of being seen as being ordered by Trump to get good numbers in the future. The only way that person will be able to gain some credibility is if the August jobs numbers (that will be released on Friday, September 5) are really terrible. If they are middling or good, people will strongly suspect that the numbers have been fudged, unless it can be shown to the contrary.

But manipulating the numbers of such a massive operation without it being obvious that you are doing so is not at all easy and Trump is stupid if he thinks that whatever lackey he appoints to that position can simply replace one set of numbers in the final report and replace them with new ones. It is going to be a very tricky process.

Donald Trump will need to take more radical action than simply firing the head of the Bureau of Labor Statistics (BLS) if he is determined to “cook the books” on jobs figures, the federal agency’s former commissioner has said.

Erica Groshen, who ran the BLS during Barack Obama’s presidency, said meddling with how government statisticians calculate unemployment and labour market trends would require “a whole new cadre” of people to be brought in by a new commissioner. It would also provoke upheaval and a likely rash of whistle-blowing among the existing workforce.
…

Yet Groshen – who condemned McEntarfer’s sacking in her role as co-chair of Friends of BLS, a group of former agency veterans – said the White House would have an uphill task if its goal was to skew official data-gathering in the manner of contemporary autocracies, or Greece and Argentina, where government statistical agencies were exposed for falsifying data, with profound economic and political consequences.

“The only gratifying thing about this has been the very strong response from all sorts of communities, raising alarm about it now that it has happened,” she said.

In the short-term, nothing at the BLS is likely to change, she said: “Bill Wiatrowski is a BLS lifer. I appointed him as acting deputy commissioner. He’s a steady hand and the operations of the BLS will continue as before.”

The acid test, Groshen said, will come when Trump nominates McEntarfer’s permanent successor. But even a like-minded appointee committed to the president’s Maga agenda will not be able, on their own, to transform the agency into a malleable puppet body.

“It would not be easy to start injecting a partisan slant, [or] start manipulating the data,” Groshen said.

“This is a very automated process that is designed to be impervious to manipulation. The whole structure of how data are analyzed, and the process from the analysis of the data to the release [of figures] would have to be redesigned. [My italics-MS]

“They would need to bring in with them a cadre of other like minded people, and then they would have to start changing the process. The career civil servants, I have no doubt, would resist that and make strong arguments against it.

“If nevertheless they persisted, you would have resignations, whistle-blowing. You would see disruptions of the sort that BLS doesn’t normally have. You would have changes in methodology that were not announced beforehand and without any documentation and the kind of transparency that statistical agencies are required to have. There probably would be delays in publication, because it’s very hard to reprogram these systems overnight.

“This isn’t just [a case of only ] one or two people would notice. This would pervade the system.”

To see the scale of the problem, we need to note that the jobs numbers are based on a survey of 629,000 businesses, a huge number.

Every month, typically on the first Friday, the BLS produces its Employment Situation Summary, known colloquially as the monthly US jobs report.

The report is generated from the two surveys: The household survey provides demographic data and the unemployment rate. The business survey provides data on pay, hours worked, and the number of jobs the US economy added or subtracted.

In addition to that particular month’s jobs information, the report also revises up or down the previous two months’ jobs totals.

Although I do not know in detail how the numbers are calculated, it is not hard to imagine that such a massive data collection and analysis system with quick turnaround is largely automated, with the raw data being sent in by the businesses electronically and then being fed into a computer program algorithm and the final numbers emerging, with human beings overseeing the whole process just to make sure that nothing weird is happening. To cook the numbers, one could intervene at different levels in the process. The most basic level is to change the jobs numbers that are received from businesses before they are used as input to the algorithm. But that kind of micro-manipulation would involve having a lot of people all the way from the top to the bottom involved and would be hard to conceal.

A different way might be to adjust weights assigned to the data categories. The 629,000 businesses would consist of samples from different parts of the country, and also different business categories involving their size and nature, such as industrial, retail, hospitality, agricultural, and so on, with each category weighted such that the overall picture is to produce a snapshot of the nation as a whole. It will always be the case that for any given month, some categories will do better than others. It would be possible to change the algorithm so that those sectors that show good job growth get greater weight than those that that show poor growth or even decline. Such manipulation would still involve a large number of people but now at the middle and upper levels of the statisticians and managers. It would require reverse engineering on a massive scale and would be hard to conceal.

The manipulation that would be easiest to conceal from the career BLS people would be for those at the very top to simply change the top line numbers in the report given to them by the professionals at the BLS and then report the fake numbers. But even that is not easy because the report that is released breaks down the jobs numbers into various categories and those numbers would also have to be changed to be consistent with the top numbers. As anyone who has been involved with any kind of data analysis knows, cooking the numbers is easy but cooking it in such a way as to not get caught is hard.

But while that would involve just a few deceitful people, others down the line would know that the numbers released to the public were not what they produced. Leaks are inevitable. And remember that it will not be sufficient to get just good August numbers. The numbers for June and July will also have to be revised upwards by huge amounts to meet Trump’s claim that they were artificially low.

Which will Trump’s lackey choose? Who knows? But what is clear is that it will be hard to find someone with any commitment to professionalism and an ethical sense to accept this job, knowing that they will be expected to be dishonest. Right now, this problem is squarely at the feet of the current deputy commissioner, who is a career professional with a sound reputation. He is in a no-win situation. He either keeps loses his good name or gets fired.